Bitcoin has recovered slightly from a steep sell-off this week that sent bitcoin spiraling toward $80,000, stoking fears a bitcoin price crash nightmare could be about to come true.
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price sell-off since it soared to a record high of $126,000 per bitcoin just last month sparked warnings of a looming $1 trillion crypto crash.
Now, as U.S. president Donald Trump is predicted to “open the flood gates,” traders are scrambling to adjust to wildly swinging odds of a December Federal Reserve interest rate cut—which have suddenly flipped dovish.
Sign up now for the free CryptoCodex—A daily five-minute newsletter for traders, investors and the crypto-curious that will get you up to date and keep you ahead of the bitcoin and crypto market bull run
Federal Reserve chair Jerome Powell is weighing wether to cut interest rates in December—something that could send the bitcoin price sharply higher.
Getty Images
Odds for a 25 basis point rate cut at the Fed’s December meeting have shot up to 70%, climbing from just 39% a day ago, according to the CME FedWatch tracker.
The jump comes after comments soothed market concerns the Fed could leave interest rates on hold next month following stronger than expected jobs data from September.
“I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral,” New York Fed President John Williams told the Wall Street Journal.
“Looking ahead, it is imperative to restore inflation to our 2% longer-run goal on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment goal.”
The change in tone from a top Fed official comes after meeting minutes from Fed’s last meeting revealed deep divisions among policy makers and the delayed U.S. jobs data came in hot, drastically reducing the possibility of a third consecutive 25 basis point cut.
Bitcoin and crypto traders have sounded positive notes despite the souring monetary policy backdrop this week, remaining upbeat even as bitcoin charts a near-40% drawdown in just over a month.
“Bitcoin’s plunge from its October highs above $125,000 to now sitting below the $90,000 mark reflects a convergence of headwinds resulting in a sharp risk-off shift,” Nicholas Roberts-Huntley, the chief executive of Blueprint Finance, said via email.
“The downturn has been driven by tariff headlines, a stronger dollar, and a wave of forced liquidations that hit an overstretched market all at once. That said, nothing about the long-term fundamentals has changed. If anything, this kind of reset tends to clear out excess leverage and set the stage for a healthier move higher. Into year-end, I expect bitcoin to stabilize and grind back upward, with a reasonable trading range between the $95,000 and $110,000 benchmarks. If macro conditions ease and flows turn positive again, a strong price push by December is absolutely still on the table.”
Sign up now for CryptoCodex—A free crypto newsletter that will get you ahead of the market
The bitcoin price has dropped sharply from its all-time high of $126,000 per bitcoin, with some predicting a bounce back is about to begin.
Forbes Digital Assets
Bitcoin and crypto market watchers have also pointed to the bitcoin price struggles through 2025 as a sign the latest bull market has yet to begin.
“The bear market began in December 2024,” Andreas Brekken, founder of trading platform SideShift.ai, said in emailed comments.
“This is clear from the BTC/EUR and BTC/GOLD charts. It was disguised by historic inflation levels of the dollar. Now that we’re already seeing blood in the streets and wide-spread capitulation I expect the next bull market to begin in the first quarter of 2026.”
Others have named the Fed’s planned ending of its quantitative tightening program, designed to suck liquidity out of the system, as potentially helping to reignite the bitcoin price boom heading into 2026.
“With Fed quantitative tightening ending on December 1, the highs between August-October may prove to be just a midpoint,” Robert Le, head of research at institutional onchain asset and yield management platform Kiln, said via email.
“If bitcoin is decoupling from its programmed cadence, I think the market could be mispricing both upside potential and downside risk, and this may be the first cycle where the peak doesn’t look like a peak.”