Bitcoin News Today: Fed's Mixed Signals and Bitcoin's $85k Tussle: Bear Market or False Dawn?

Bitcoin's recent volatility has intensified as the cryptocurrency tumbles below $85,000, sparking debates over its near-term trajectory amid shifting Federal Reserve policy and market sentiment. The asset's sharp decline—down over 30% from its October peak of $126,296—has triggered record outflows from Bitcoin ETFs, with $3.5 billion pulled in November alone, nearing the worst month in history for the sector. Meanwhile, New York Fed President John Williams' comments on potential December rate cuts have injected uncertainty, sending Bitcoin briefly rebounding above $84,000 after a 10% overnight selloff.

The Federal Reserve's pivot toward dovish rhetoric has exacerbated market jitters. Williams' remarks, emphasizing room for policy adjustments to balance inflation and employment goals, contrasted sharply with hawkish counterparts like Cleveland Fed President Beth Hammack, who downplayed labor market concerns. The resulting mixed signals have left investors wary, with Bitcoin's price swing reflecting the broader market's sensitivity to central bank ambiguity.

Technical analysts and institutional players are split on Bitcoin's future. Some argue the asset is entering a bear cycle, citing historical patterns of a four-year cycle that includes a 12-month bull run, followed by a year of decline and two years of recovery. A Seeking Alpha article projects Bitcoin could retreat to $36,000 by 2026, warning of prolonged weakness until November 2026. Conversely, bullish narratives persist. Cathie Wood's Ark Invest, despite revising its 2030 price target from $1.5 million to $1.2 million, remains "extremely bullish," while Strategy CEO Michael Saylor's firm, which holds 640,808 BTC, continues to accumulate the asset amid a 7% quarterly price rebound as reported by Coindesk.

The market's turmoil has also highlighted diverging investor strategies. Jim Cramer's recent jabs at crypto "cheerleaders" underscored skepticism toward long-term bullish forecasts, particularly as Bitcoin's structure echoes its 2018 breakdown. Meanwhile, tax advisors are advising investors to leverage losses from the downturn to offset capital gains, with Forbes noting that selling Bitcoin at a loss could reduce taxable income by up to $3,000 in 2025.

Bitcoin's path forward hinges on macroeconomic clarity. With the Fed's December rate decision looming and inflation stubbornly above 2%, market participants remain divided. A Bloomberg analyst noted that Bitcoin's Sharpe ratio—a measure of risk-adjusted return—has plummeted, signaling rare but potentially lucrative opportunities for those betting on a rebound. As the cryptocurrency oscillates between $80,000 and $85,000, the next few months will test whether this downturn is a cyclical correction or a prelude to a deeper bear market.