Bitcoin News Today: Bitcoin Volatility Intensifies Near $91K as Fed Decision Looms

Bitcoin traded near $91,000 on December 8, 2025, amid a fragile market setup and uncertainty ahead of the Federal Reserve's final policy meeting of the year. The cryptocurrency had faced sharp intraday corrections earlier in the week, dropping to $84,930 before stabilizing slightly. Analysts noted structural weaknesses, including ETF outflows, rising unrealized losses, and thin liquidity in derivatives markets, all of which increased sensitivity to macroeconomic shifts.

The Fed is expected to cut interest rates by 25 basis points at its December 10 meeting, the third such reduction of the year, which could provide a short-term boost to risk assets.

However, traders are closely watching whether the central bank's tone signals prolonged accommodation or hints at a more cautious approach. The S&P 500 and other equities had also dipped slightly on the day, reflecting broader caution among investors.

Bitcoin's price action was constrained by a range between $83,000 and $95,000, with key resistance at $93,000–$95,000 and support near $88,000. A break below $88,000 could trigger further declines toward $85,000 and even the mid-cycle accumulation base at $76,000. Technical indicators showed a weakening but not yet exhausted market, with the RSI near 35 and the MACD line showing early signs of stabilizing.

How Markets Reacted

The broader crypto market mirrored Bitcoin's struggle, with the total market cap falling to $3.1 trillion after a $80 billion drop. Bitcoin's dominance increased to 54.6%, as defensive capital rotated away from altcoins amid volatility. Major altcoins like Ethereum and XRP also faced mixed signals, with Ethereum's price slipping below $3,200 and XRP bouncing off key support at $2.00.

Bitcoin ETF flows had turned volatile in recent weeks, with significant outflows concentrated in a few major funds, such as BlackRock's IBIT, which saw over $2.7 billion in redemptions over the past five weeks. These outflows were largely attributed to the unwinding of basis trades-arbitrage strategies that had been profitable while futures premiums remained high. However, the market had yet to see a broad panic, and many analysts argued that the remaining institutional holdings reflected genuine conviction in Bitcoin's long-term value.

Risks to the Outlook

Bitcoin's current setup left it vulnerable to external shocks, particularly in a macroeconomic environment marked by uncertainty. The U.S. government shutdown had delayed key inflation data, creating a data vacuum that added to market fragility. Meanwhile, a surge in 10-year U.S. Treasury yields to 4.19% and a sharp sell-off in Japanese government bonds highlighted risks to global liquidity. These factors could amplify pressure on Bitcoin, especially if the Fed's policy path remained unclear.

Derivative markets added another layer of complexity. Bitcoin perpetual futures open interest had dropped sharply, reflecting the unwinding of leveraged positions. This decline correlated closely with ETF outflows, as arbitrageurs reversed their bets. However, the reduction in open interest also signaled a de-leveraging of the market, which could serve as a reset for a potential rally in early 2026.

What Analysts Are Watching

Market participants are closely monitoring a few key variables as the year draws to a close. The Federal Reserve's policy statement and forward guidance from the December meeting will be critical in shaping sentiment. A dovish pivot could reinvigorate risk appetite and drive capital back into Bitcoin, while any hint of prolonged tightening could deepen the current bearish trend.

On-chain data also pointed to a potential turning point. Over seven million Bitcoin addresses now held unrealized losses, a sign of bearish sentiment similar to the 2022 consolidation phase. However, institutional buying activity had remained steady, with Bitcoin ETFs recording five consecutive days of net inflows. These inflows suggested a possible local bottom, though analysts cautioned that further volatility was likely before a clear trend emerged.

Looking ahead, Bitcoin's trajectory in 2026 will depend heavily on macroeconomic conditions, institutional adoption, and the Fed's rate path. If the central bank continues to ease policy and liquidity improves, analysts like Derek Lim of Caladan see potential for Bitcoin to reach $110,000 to $135,000 by mid-2026. However, this scenario hinges on the market overcoming its current fragility and avoiding a breakdown below $75,000.

For now, Bitcoin remains in a delicate balancing act, with a fragile setup that could easily tip in either direction. Investors are advised to remain cautious, with a focus on managing risk while watching for potential catalysts that could spark a new bull cycle.