Bitcoin News Today: Bitcoin Volatility Intensifies Near $92.6K as Fed Easing Fuels $500M Liquidations

Bitcoin wavered near $92,640 on December 12, 2025, as traders debated whether a recent price drop had been manipulated or was part of a natural market correction. The cryptocurrency had swung from $94,000 to as low as $88,000 in hours before recovering slightly, triggering $500 million in forced liquidations. Institutional demand, however, showed resilience with $1.9 billion in major purchases recorded according to reports.

The Federal Reserve's recent 25-basis-point rate cut, bringing the federal funds range to 3.5%–3.75%, has created uncertainty over whether further easing will support or destabilize Bitcoin. Markets are pricing in an 87% probability of a similar cut in the near term, as central bank data shows the Fed grapples with a weakened labor market and delayed government data from the recent partial shutdown.

Investor sentiment remains split. On one hand, the rate cut could drive capital into risk assets like Bitcoin, especially as the Fed signals accommodative policy. On the other, the 25-basis-point move came with a 9–3 vote, revealing internal divisions, and Fed Chair Jerome Powell's cautious remarks on inflation and labor weakness have kept bearish sentiment alive.

Why the Standoff Happened

The volatility came after a sharp drop in Bitcoin prices, which saw the coin lose nearly $6,000 in a matter of hours. This drop, which occurred in the wake of the Fed's decision, triggered a wave of leveraged positions being liquidated, with longs accounting for most of the damage. Analysts have pointed to this as a mid-cycle correction rather than a structural breakdown. However, the speed and scale of the move have raised concerns about liquidity and market stability.

The price action is also being viewed through the lens of broader macroeconomic trends. The Fed's dovish pivot has been seen as potentially bullish for Bitcoin, as seen in the 2024 analogy where BTC rallied 42% in six weeks after a similar policy shift. But with sticky inflation and a fragile labor market still clouding the outlook, investors are wary of overreacting to a single rate cut.

How Markets Reacted

Bitcoin's recent performance was mirrored by other risk assets, but with less enthusiasm. U.S. equities saw modest gains, with the S&P 500 and Nasdaq ending the session in positive territory. However, crypto failed to keep up, with Bitcoin lagging despite a 5% jump following comments from President Donald Trump about an imminent rate cut under the next Fed Chair. The move saw over $263 million in short liquidations in four hours, pushing BTC back toward $95,000.

The broader crypto market also showed mixed signals. The total crypto market cap dipped by $80 billion, settling at $3.1 trillion, while Bitcoin's dominance rose to 54.6%. This suggests a shift of capital toward Bitcoin as a defensive play, but it also highlights the fragility of altcoins under the same macro pressures. Ethereum and XRP were among the hardest-hit, each dropping over 3% on the day according to market data.

What Analysts Are Watching

Analysts are closely watching key price levels as Bitcoin oscillates between $90K and $94K. Immediate resistance is seen at $93,000–$95,000, with institutional traders viewing this range as critical for confirming the next phase of the rally. A sustained move above $95K could set up a test of $100K by mid-2026. On the downside, support at $88K has been tested twice this month, and a breakdown could lead to a retest of $76K, the mid-cycle accumulation base.

Technical indicators remain neutral but show early signs of exhaustion. The RSI is hovering near 56 on the 4-hour chart, while the stochastic RSI signals potential waning momentum according to technical analysis. On-chain data, however, remains supportive, with declining exchange reserves and rising hash rates indicating accumulation by long-term holders. Institutional ETF inflows continue to attract steady demand, but the market remains sensitive to Fed communication and broader risk sentiment as reported by analysts.

Risks to the Outlook

Despite the resilience in on-chain metrics and ETF inflows, risks remain. A shift in Fed policy toward a more hawkish stance could reignite bearish sentiment, especially if inflation remains stubborn. The market is also exposed to potential deleveraging events, as seen in the Oracle-led selloff of AI-related equities that rippled into crypto. A breakdown in the broader tech sector could pressure risk assets across the board.

Moreover, the crypto market's dependence on macroeconomic cues means it remains more fragile than traditional equities. This was evident on December 9, when the market failed to rally alongside the broader risk-on mood. Analysts attribute this to leveraged traders and liquidity-sensitive positions being more vulnerable to sudden policy shifts.

What This Means for Investors

For now, a "Hold" stance is justified for Bitcoin given the mixed signals from both fundamental and technical indicators. Investors are advised to focus on key levels such as $88K and $95K, with tactical accumulation favored below $88K and a cautious eye on upside potential toward $100K. ETF demand and institutional balance-sheet accumulation are expected to drive the next phase, particularly if liquidity conditions improve in 2026.

With the Fed's policy path still uncertain and crypto markets reacting instantly to macro guidance, the next few months will be crucial in determining whether Bitcoin can break out of its current range or if it will remain constrained by macro caution.