Bitcoin News Today: Markets Pin Bitcoin's Fate on Fed's December Rate Decision

Bitcoin faces a pivotal moment at the end of 2025 as its path to a potential $100,000 price target becomes heavily dependent on the U.S. Federal Reserve's decision on interest rates. Markets are currently pricing in an 89% chance of a 25-basis-point rate cut in December, according to the CME FedWatch Tool, pushing investors to closely monitor the Fed's upcoming meeting. Analysts and traders remain split on whether the rate cut will provide enough of a tailwind for Bitcoin to reverse its recent bearish trend.

The cryptocurrency has struggled to maintain its footing after a 36% pullback from its October peak of $126,000, bottoming near $80,000 before staging a partial recovery. Despite a recent rebound, Bitcoin closed November with a 17–18% loss, marking its worst monthly performance since March. The asset's ability to break key resistance levels, such as $96,000–$98,000, will be crucial in determining whether the bearish phase ends or continues.

Market participants have been closely following the Federal Reserve's shifting stance on monetary policy. Earlier in November, hawkish comments from Fed Chair Jerome Powell pushed odds of a December rate cut down to about 30%. However, more dovish remarks from officials like Governor Christopher Waller helped lift expectations back into the 80–90% range. This rapid reversal has led to increased speculation that a rate cut could act as a catalyst for Bitcoin's next move.

Fed Policy and the Path to $100K

The Federal Reserve's decision to cut rates has historically been viewed as a positive for high-beta assets like Bitcoin, as lower interest rates reduce the cost of capital and can drive liquidity into riskier investments. However, not all analysts are convinced that the cut will have a significant impact. Kevin O'Leary, a well-known investor, argues that Bitcoin has matured beyond short-term monetary policy influences, citing its recent stabilization around $91,000 after a sharp decline. O'Leary believes the cryptocurrency will remain range-bound within 5% of that level regardless of the Fed's decision according to a market analysis.

Despite this skepticism, some market participants remain optimistic. BTIG, a global financial services firm, has called for a "reflex rally" back toward $100,000, citing oversold conditions, favorable seasonality, and a Fed pivot as key drivers. The firm's technical analysis suggests that a 36% drawdown from October's high has reset positioning, creating conditions for a short-term rebound. However, the path to $100,000 remains uncertain, with key resistance levels still in play.

Risks to the Outlook

While the market is pricing in a high probability of a rate cut, there are still significant risks that could derail Bitcoin's recovery. One major concern is leverage in the derivatives market. On December 1, a sharp sell-off triggered by a DeFi exploit and rising Japanese bond yields led to over $200 million in long liquidations within an hour. If Bitcoin falls below the $80,000–$81,000 support range, further forced deleveraging could intensify the downward pressure.

Institutional demand and ETF flows are also areas of concern. U.S. spot Bitcoin ETFs recorded a record $3.48 billion in outflows in November, according to Coindesk, raising questions about whether the bearish trend could continue. While late November saw a partial recovery in mining and crypto-linked equities, the broader market remains cautious. Security incidents like the Yearn Finance exploit and a recent hack at a major Korean exchange also highlight the industry's vulnerability, potentially deterring institutional adoption and support for Bitcoin's rally.

What This Means for Investors

For investors, the coming weeks will be critical in determining Bitcoin's near-term trajectory. The December 9–10 FOMC meeting will be a key event, as traders will closely watch whether the Fed follows through on its dovish guidance. If a 25-basis-point cut is delivered, the market will also assess the accompanying forward guidance to determine if the rate-hiking cycle is truly over. A more aggressive easing path could provide additional tailwinds for Bitcoin and other high-beta assets.

Meanwhile, on-chain and derivatives data will offer insight into whether the market is building a sustainable base for a new rally. Traders will be watching for signs of reduced leverage, positive funding rates, and a healthy rebuild in open interest. Institutional accumulation levels below $80,000 are seen as a potential catalyst for long-term holders, but a failure to reclaim key resistance levels could prolong the bearish trend.

As Bitcoin trades around $86,800, the risk-reward dynamic is beginning to favor accumulation for those with a long-term horizon. However, tactical traders should remain cautious, treating any rallies as opportunities to reduce exposure until the $90,000–$92,000 range is firmly reclaimed. The coming weeks will test whether the market has priced in all the risks and whether the Fed's pivot can act as the catalyst for Bitcoin's next move.