Bitcoin News Today: Bitcoin Rallies on Fed Cut Hopes, Eyes Powell for Clarity

Bitcoin is showing early signs of a potential "Santa rally" as the market anticipates a Federal Reserve rate cut in December 2025. With a 92% probability of a cut, optimism is rising for a year-end rebound. Analysts point to improving liquidity and macroeconomic conditions as key drivers of this bullish scenario.

The cryptocurrency retested key support levels near $80,000 recently, and technical indicators suggest stabilization.

Coinbase Institutional noted that ETF inflows are adding incremental support to Bitcoin's price. This comes amid cautious sentiment from both institutional and retail investors.

Meanwhile, the tone of Federal Reserve Chair Jerome Powell during the December 10 meeting will be closely watched. Any hawkish signals could suppress the rally, while dovish comments could fuel optimism. His remarks will shape the market's short-term trajectory ahead of the holiday season.

Why the Standoff Happened

Bitcoin's recent hesitation reflects broader trader anxiety, driven by institutional caution and macroeconomic uncertainties. Despite rising global M2 liquidity and favorable macro tailwinds, many investors remain on the sidelines, waiting for clearer signals from central bank policies.

November's sell-off was partly attributed to Powell's previous hawkish comments, which intensified fears about tighter monetary policy in early 2026. This highlights the crypto market's sensitivity to Fed messaging. A shift toward dovish rhetoric could reverse this sentiment and ignite a rally.

What Analysts Are Watching

Market analysts are closely monitoring several factors. The likelihood of a Fed rate cut, now at 92%, is the most immediate catalyst for a December recovery. Ending quantitative tightening would remove barriers to upward momentum, but Powell's remarks will remain a key wildcard.

Nic Puckrin of Coin Bureau emphasized that investors will scrutinize Powell's every word during the post-decision press conference. Any hints of tighter policy could cap Bitcoin's gains, reinforcing the importance of messaging in shaping market sentiment. This dynamic was evident in November's reaction to previous Fed statements.

Risks to the Outlook

Despite favorable conditions, risks remain. A hawkish Fed stance in early 2026 could extend Bitcoin's correction beyond December. Additionally, any major geopolitical events—such as trade disputes or economic shocks—could disrupt the rally. Liquidity conditions may also influence market volatility in the short term.

Another uncertainty is the potential appointment of Kevin Hassett as the next Fed Chair in early 2026. If confirmed, his more dovish approach could ease financial conditions and support Bitcoin's long-term gains. However, this remains speculative at this point.

What This Means for Investors

Investors are advised to closely watch Fed signals and market reactions in the coming weeks. With ETF inflows stabilizing and institutional adoption rising, Bitcoin's path toward $135,000 in 2026 is contingent on sustained policy support. For now, consolidation near $90,000 is expected as the market awaits clarity.

The December 2025 rally, if realized, would mirror historical patterns where accommodative Fed policies preceded crypto market gains. This could reinforce Bitcoin's role as a hedge against traditional assets, particularly if institutional demand continues to grow.