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Bitcoin traders are turning cautiously optimistic after the odds of a U.S. Federal Reserve interest-rate cut in December nearly doubled, raising hopes that a macro-driven price bottom may finally be forming.Bitcoin briefly traded back above $85,000 on Friday, recovering from deep weekly losses, as traders recalibrated expectations following a sharp shift in Fed policy probabilities.Fed Rate-Cut Odds Jump From 39% to 69% in 24 HoursAccording to the CME FedWatch Tool, the probability of a 25 bps rate cut in December surged to 69.4%, up from 39.1% just one day earlier — a nearly 30-point jump.Crypto analyst Moritz captured the mood on X:“Let’s see if that’s enough to find a bottom here for now.”Bitcoin is currently trading around $85,071, down 10% over the past week, according to CoinMarketCap.Several analysts attributed the dramatic repricing to dovish comments from New York Fed President John Williams, who said the central bank “can cut rates in the near term” without compromising its long-term inflation target.Bloomberg’s Joe Weisenthal noted that Williams’ remarks were a direct catalyst for the market’s “massive repricing.”Analysts Call the Macro Setup “Unfathomably Bullish”Not everyone agrees. Economist Mohamed El-Erian warned investors not to get “carried away.”But the crypto community’s tone shifted sharply into risk-on territory.Crypto analyst Jesse Eckel said the broader structure remains overwhelmingly positive:“If you zoom out, the setup is unfathomably bullish… We’re going from a tightening cycle into an easing cycle.”Another analyst, Curb, predicted:“Crypto will explode in a massive rally.”Historically, rate cuts tend to boost risk assets like Bitcoin because bond yields fall, driving capital toward higher-risk, higher-reward markets.Coinbase Says Markets Are “Mispricing” the FedCoinbase Institutional pushed back against traders betting on no cut in December:“We believe the odds for a rate cut are mispriced.”Coinbase pointed to:ongoing tariff effectsprivate-market datareal-time inflation trendsThe exchange argued that tariff-related dynamics can lower inflation and raise unemployment — both factors that typically push the Fed toward cuts.BTC Still Faces ‘Extreme Fear’ ConditionsDespite Friday’s optimism, market sentiment remains fragile.The Crypto Fear & Greed Index posted a score of 14, indicating Extreme Fear across the crypto market.Bitcoin has fallen sharply in November amid:record U.S. spot Bitcoin ETF outflowsslowing liquiditymacro uncertaintyrising short-term holder sellingFX turbulence in Japanand a broader washout in high-risk assetsStill, some traders believe a rate-cut-driven pivot could offer Bitcoin its strongest catalyst since Q1 2024.