Bitcoin price broke through the $92,000 mark last night, peaking at around $94,588, and has currently fallen back to near $92,500. The market is reigniting optimistic sentiment. Traders view this week's Federal Reserve FOMC meeting as a key catalyst, combined with record M2 growth and U.S. Treasury rebalancing, creating a convergence of short-term and medium-term bullish factors.
Bitcoin market analysis: poised to take off after consolidation
On-chain data shows that despite the low volatility in Bitcoin prices, the 'activity' indicator is recovering, with trading volume reaching multi-year highs, suggesting that long-term holders may be returning to the market and potential demand is reviving.
Bitfinex reported last week that the market showed signs of "seller fatigue," and after deleveraging and panic selling, the pressure on short-term holders has eased.
Notably, Wall Street strategist Geoff Kendrick has issued a cautious tone, lowering his year-end target to $100,000 (from a previous range of $133,000-$220,000) and postponing his long-term forecast of $500,000 to 2030 (originally 2028), but he emphasized that this is not a bearish reversal but rather reflects a "market cold wave"—a slowdown in growth rather than a crash. Kendrick believes that structural demand remains intact, but macro uncertainties have slowed the accumulation pace. Historical experience shows that such consolidations are often precursors to significant expansions; once liquidity improves, the process of Bitcoin moving towards six figures will accelerate.
Federal Reserve interest rate cut direction: dovish surprise or liquidity injection
Today (December 10), the Federal Open Market Committee (FOMC) meeting is about to conclude, and market pricing shows a nearly 90% probability of a 0.25% rate cut, lowering the target range for the federal funds rate to 3.5%-3.75%. This is the third rate cut in 2025, following cuts of 0.25% in September and October, gradually moving from the 4.25%-4.5% range down to 3.75%-4%.
Analysts believe that this meeting may bring a "dovish surprise": the Federal Reserve may inject liquidity through a creative bond purchase mechanism instead of directly restarting quantitative easing (QE). They predict that the central bank will "start the money printing machine" to monetize the deficit, entering a sustained rate cut cycle while expanding the balance sheet (currently about $6.5 trillion).
Historical data shows that volatility is severe on FOMC meeting days, but dovish signals often trigger a rebound in the crypto market. Traders are eyeing the critical resistance level of $94,200, and if successfully broken, it could target the $100,000-$103,000 range. If the Federal Reserve signals more easing, Bitcoin may re-test the $115,000 high.
Current status of M2 money supply: a simple and easy-to-understand liquidity barometer
M2 money supply is a key indicator of the size of the U.S. economy's "wallet," which includes cash, checking deposits, and liquid funds (such as savings accounts), essentially tracking the "hot money" that is freely circulating in the market. The latest data shows that U.S. M2 has reached a record $22.3 trillion (with October data at $22.298 trillion), with growth being the fastest since mid-2022, with an annual increase of about 0.4%. This is thanks to the Fed's loose policy, akin to "opening the floodgates."
Historical patterns are clear: when M2 rises, Bitcoin and the crypto market often rise in sync, as excess liquidity seeks high-return assets; conversely, a slowdown triggers corrections. Currently, this new liquidity cycle has yet to be fully digested by the market, and analysts believe it will become the "invisible driving force" behind Bitcoin's rebound—more money flowing in will amplify risk appetite, pushing prices from $94,000 towards $100,000.
U.S. Treasury situation: selling is a gradual adjustment, not the end of the world
U.S. Treasury bonds are a global "safe haven," but recent reductions by BRICS nations (currently 11 members) have raised concerns.
China will reduce its holdings by $71.5 billion from September 2024 to September 2025 (from $772 billion to $700.5 billion), India by $44.5 billion, Brazil by $61.9 billion, and Saudi Arabia by $9.6 billion, totaling approximately $187.5 billion.
Here's an explanation: this is just "gradual diversification"—emerging market central banks are diversifying risks by buying gold or other assets, rather than "selling U.S. debt."
At the same time, foreign total holdings have not decreased but increased, from $8.77 trillion to $9.25 trillion. Private buyers (such as investors) filled the gap, and the U.S. Treasury stated in November that the net inflow of private funds in August-September offset official outflows, stabilizing the overall market. The International Monetary Fund (IMF) data shows that the dollar accounts for 56.32% of global reserves, a slight decline of 92% due to exchange rate fluctuations, rather than a central bank "de-dollarization" frenzy. Gold demand has reached historic highs (accounting for one-fifth of global demand), and central banks prefer it as a zero-risk hedge.
What about the impact on crypto? These reductions strengthen Bitcoin's "narrative appeal": as a non-sovereign "hard asset," it hedges against fiscal deficits, geopolitical risks, and the weakening of the dollar. However, the actual connection is unstable—selling off is more about tactical rebalancing than a disaster signal. Private enthusiasm is high (companies like MicroStrategy are buying heavily), but national thresholds are high (for example, the Swiss central bank refused to accept Bitcoin in April, citing high volatility). Overall, this promotes the hedging logic, but Bitcoin's role remains speculative: if the motivation is concern over U.S. fiscal sustainability, it is favorable; if it is merely seeking higher returns, the impact is limited.
The impact of macro factors on the crypto market: a dual drive of liquidity and hedging
The Federal Reserve's interest rate cuts and M2 expansion directly inject "fuel," lowering the opportunity cost of holding zero-yield assets (such as Bitcoin) and driving funds from bonds to crypto. The real yield (10-year TIPS) has recently risen, briefly suppressing the market, but if interpreted as an inflation signal (rather than tightening), it could actually be a positive factor.
The reduction in Treasury holdings amplifies macro anxieties: the dollar's share is gradually declining, gold purchases are heating up, stimulating the private market to seek "hard limit" assets, and increasing Bitcoin's appeal as a hedging tool.
Coinbase CEO Brian Armstrong stated that the U.S. is entering the "crypto free gold era," thanks to the SEC dropping its lawsuit against Coinbase, political donations, and bipartisan support, with an improved regulatory environment further boosting confidence. These factors intertwine: recovering liquidity alleviates panic, and a diversified narrative amplifies Bitcoin's strategic value. However, volatility remains—if there is a "hawkish rate cut" after the FOMC, the risk of a short-term pullback is high.
Outlook: cautiously optimistic, waiting for a breakthrough
The outlook for Bitcoin is positive, but the pace is slowing: the probability of closing at $100,000 by year-end is high, and it may return to $115,000 in 2026. Macro uncertainties (such as tariffs and geopolitical risks) may delay expansion, but the core trend remains unchanged—stagnation is not the end.
In the long run, private adoption is accelerating (ETF inflows turning positive), combined with the liquidity cycle, Bitcoin will capture the trend of "non-sovereign assets."
Recommendation: Watch resistance levels for short-term positions, accumulate in the medium to long term, and consider the Federal Reserve as a key barometer.
