Bitcoin News Today: Fed's Tightrope Walk and Death Cross Signal Prolonged Bitcoin Correction

Bitcoin's recent slide below $91,000 has intensified concerns over a broader market correction, driven by a confluence of ETF outflows, shifting Fed policy expectations, and technical bearish signals. The cryptocurrency's decline has been exacerbated by a record $523 million in outflows from BlackRock's iShares Bitcoin Trust (IBIT) on Tuesday alone, part of a near $3 billion exodus from U.S. Bitcoin ETFs in November. This selloff, coupled with prolonged outflows from Ethereum and XRP ETFs, reflects a weakening in institutional and retail demand.

The Fed's tightening cycle has become a central focal point. Federal Reserve Governor Christopher Waller, advocating for a 25-basis-point rate cut at the December 9–10 meeting, cited a "weakening labor market" and slowing economic growth as justification. His stance contrasts with more hawkish officials, creating uncertainty around the central bank's next move. Markets now price in a 46% chance of a December cut, down sharply from 93.7% a month ago, while Abu Dhabi's Mubadala Investment Co. has tripled its Bitcoin holdings in recent months, signaling institutional confidence amid volatility.

Technical indicators further underscore bearish sentiment. Bitcoin's 50-day and 200-day exponential moving averages crossed below the $106,000 level, forming a "death cross"-a historically bearish pattern. The RSI entered oversold territory, and stablecoin exchange balances hit an 11-month low of $85 billion, reflecting heightened risk-off behavior. Meanwhile, smart money traders on Nansen's platform added $5.7 million in short positions in 24 hours, amplifying downside expectations.

The selloff has also exposed vulnerabilities in the crypto ecosystem. Bitmine Immersion's Tom Lee warned of financial deficits at two major market makers, while the XRP derivatives market remains stagnant, with open interest barely above $3.85 billion. These developments have pushed Bitcoin and Ethereum into a technical bear market, with ETH down 35% from its year-high and BTC retreating 25%.

As the Fed's December decision looms, investors remain split. While Waller's dovish stance and Abu Dhabi's bullish bets offer some support, the broader economic backdrop-including political pressures on the Fed and unresolved macro risks-suggests a cautious outlook. For now, the market appears to be pricing in a prolonged correction, with key support levels and institutional sentiment likely to dictate the next directional move.