Bitcoin’s Volatile December: Fed Cut Hopes Drive Rebound Amid Lingering Caution
The cryptocurrency market in early December 2025 remains highly volatile, with Bitcoin (BTC) reclaiming $92,000 on December 8 amid strong expectations for a Federal Reserve rate cut. After plunging to lows near $80,000 in late November—erasing much of the post-election rally—BTC has staged a partial recovery, trading around $91,000-$93,000. This rebound reflects shifting macro dynamics, including a 95% priced-in probability of a 25bps cut this week, which could inject liquidity and support risk assets.
Fed Rate Cut Expectations and Macro Impact
The primary driver moving markets this week is the anticipated Federal Reserve interest rate decision. Markets are nearly certain of a third 25bps cut in 2025, with CME FedWatch showing 95% odds as of December 7. Lower rates typically weaken the dollar and make yield-bearing assets less attractive, channeling capital into high-risk plays like crypto.
This catalyst arrives as BTC shows signs of bottoming after a 35% drop from its October peak near $126,000. On-chain data indicates leverage has been flushed, long-term holders are accumulating, and whale OTC buys exceed 5,200 BTC recently. Analysts note the correction mirrors mid-cycle resets in prior bull markets (e.g., 2017, 2021), not the start of a bear winter. A confirmed cut could propel BTC toward $100,000+ by year-end, especially with improving global liquidity and institutional inflows resuming. However, hawkish surprises or persistent inflation could reignite downside pressure, keeping volatility elevated.
Other news:
Positive
Institutional adoption accelerates: Vanguard allows crypto ETF access for clients; Bank of America permits up to 4% portfolio allocations.
Whale accumulation strong despite ETF outflows, signaling confidence from big players.
Regulatory clarity advances: UK treats crypto as inheritable property; positive developments in South Korea.
Neutral
Market fear & greed index remains low at ~24, reflecting cautious sentiment.
December historically quiet for BTC performance, with mixed returns.
Negative
Record ETF outflows: BlackRock’s IBIT loses billions in recent weeks, driven by basis trade unwinds.
Broader sell-off erased trillions in market cap since October highs.
On-chain stress echoes early 2022 patterns, with rising supply in loss.
What coins are moving the most lately? Movers, buying opportunities
Bitcoin dominates recent movement, rebounding over 10% from late-November lows near $80,000 to above $92,000, driven by Fed cut bets. Altcoins have lagged, with many still down 30-40% from peaks. Ethereum (ETH) showed relative strength with 3%+ daily gains but remains volatile.
No clear standout buying opportunities amid ongoing caution and potential for further deleveraging. Institutional shifts (e.g., Vanguard access) support long-term BTC holding, but short-term risks persist. As no strong buy signals emerge beyond dips, focus shifts to Bitcoin’s price evolution for context.
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