Bitcoin started the second week of December above $90,000 as “Santa rally” talk began.
- Bitcoin is testing a key resistance level in the low $90,000s, though many traders expect another pullback.
- This week’s Federal Reserve interest-rate decision looms over risk assets, even amid widespread expectations of a rate cut. Analysts say the Fed’s move could determine whether a Santa rally materializes for stocks.
- For Bitcoin, seasonal patterns suggest this year’s “bear market” bottom may follow a timeline similar to 2022.
- Open interest and leverage remain muted, offering only modest upside for bulls in the near term.
Fibonacci level emerges as key BTC support
Bitcoin’s price volatility returned into the weekly close, a pattern that has become increasingly common this quarter.
After dipping toward $87,000, BTC/USD recovered to close the week near $90,000, before exhibiting further erratic moves on shorter time frames, according to data from Cointelegraph Markets Pro and TradingView.
Traders remained cautious of potential fakeouts in either direction.
In a recent X thread, trader CrypNuevo highlighted the 50-day exponential moving average (EMA) as a likely retest level for BTC.
“For shorts, I’m watching a 1D 50 EMA retest, which I expect to hover around $95,500 and mark the range highs,” he wrote.
CrypNuevo noted that Bitcoin currently lacks a “clear base” for long positions, leaving the low $80,000 zone still in play.
“Some liquidations could occur in both directions, with slightly more pressure to the upside in the $94,500–$95,300 range. If price reaches that area first, I’ll be looking for short opportunities targeting a potential retest of the low $80,000s,” he added, sharing charts of exchange order-book liquidity data.
Crypto trader, analyst, and entrepreneur Michaël van de Poppe took a more optimistic view, pointing to “intense” buying pressure at Bitcoin’s local lows.
“Given the strong buying activity, I expect we’ll break higher and hold above $92,000 in the coming days,” he told followers on X on Monday.
“That would result in a rally towards $100K pre-2026.”
On the downside, trader Daan Crypto Trades highlighted Fibonacci retracement levels as a key support for bulls, pinpointing $84,000—a level retested at the start of December.
“Price is still holding the .382 area from the entire bull market so far,” he noted in his analysis.
“I think this is a key area for the bulls to defend. It’s also pretty much the last major support before testing the April lows again, which would break this high timeframe market structure.”
FOMC week puts Fed in the spotlight amid labor market uncertainty
With few major U.S. economic data releases this week, attention turns squarely to the Federal Reserve.
The Federal Open Market Committee (FOMC) meets Wednesday to announce any changes to interest rates, with markets largely pricing in a 25-basis-point cut.
Recent jobs data indicate a weakening labor market, suggesting increased pressure to cut interest rates. Analysts say the Fed is caught between a rock and a hard place, as inflation remains a concern that could worsen with a rate reduction.
“Nonfarm payrolls have now declined in 5 of the last 7 months, marking the worst streak in at least five years,” trading resource The Kobeissi Letter noted in a weekend X post on U.S. employment data.
“Deterioration of the job market is accelerating.”
Analytics firm Mosaic Asset Company took a more optimistic view, highlighting favorable conditions for risk assets.
“With inflation above target, a resilient economy, and the S&P 500 near all-time highs, the Fed appears poised to cut rates for a third consecutive meeting,” Mosaic wrote in the latest edition of its newsletter, The Market Mosaic.
The firm added, “We can’t imagine more bullish conditions for the stock market than rate cuts into loose financial conditions, with the economy showing continued growth that supports the earnings outlook.”
On FOMC day, markets will closely watch Fed Chair Jerome Powell for guidance on the future policy trajectory, as he delivers a speech and answers press questions following the rate announcement.
Over the weekend, The Kobeissi Letter reflected on Powell’s May 2024 FOMC press conference, describing his dismissal of stagflation risks as “the day the Fed lost control.”
Santa rally chatter tempered by Fed
While stocks appear poised for a year-end boost from a mix of bullish catalysts, crypto commentators are already weighing the likelihood of the so-called “Santa rally” extending into digital assets.
As Cointelegraph reported, crypto has significantly lagged behind stocks in Q4, while the S&P 500 hovers near record highs.
Network economist Timothy Peterson observed that, historically, conditions often align favorably for Bitcoin toward the end of the year.
Taking a contrarian view, Joao Wedson, founder and CEO of crypto analytics platform Alphractal, expects BTC/USD to finish 2025 in a “sideways” pattern.
“On average, Bitcoin spends 170 days per year in negative territory,” Wedson noted, sharing a chart tracking accumulated negative trading days for BTC.
“In 2025, it has already accumulated 171 negative days — which strongly suggests this year is likely to close in a sideways price range. If a deeper drop is coming, it will most likely happen in 2026.”
Earlier, Cointelegraph reported that the Santa rally remains largely dependent on the Fed.
“The S&P 500 pullback from late October into November coincided with declining odds of another rate cut this month. Recent comments from key Fed officials pushed cut expectations higher again, which helped spark a stock market recovery,” Mosaic Asset Company noted.
Is $89,000 the new $16,000 for Bitcoin?
Regarding Bitcoin price cycles and seasonality, the latest data gives bulls reason for optimism.
Network economist Timothy Peterson shared a comparison on X over the weekend between BTC/USD this year and in 2022–23, suggesting that a long-term price bottom is either in place or imminent.
In late 2022, Bitcoin hit a multiyear low of $15,600 after a severe bear market that erased roughly 80% from its previous all-time highs. Its rebound began early in 2023, and if history repeats, hodlers may only have weeks to wait before upward momentum returns.
“$89,000 is the new $16,000,” Peterson concluded.
As Cointelegraph reported, comparisons to 2022 have become increasingly common since October, when Bitcoin abruptly ended its consecutive streak of new all-time highs and fell 36% over six weeks.
By late November, Timothy Peterson noted that Bitcoin’s monthly price correlation with 2022 had reached 98%.
Open interest highlights Bitcoin “apathy”
An encouraging signal from the Bitcoin derivatives market keeps the possibility of a full-fledged rally alive.
Data from on-chain analytics platform CryptoQuant shows that open interest (OI) across Bitcoin exchanges has fallen to its lowest levels since April, when BTC/USD traded around $75,000.
“This decline typically reflects one of two things: investor capitulation or investor apathy,” contributor COINDREAM wrote in a CryptoQuant Quicktake blog post on Monday.
“Historically, periods of apathy and low participation have often marked attractive buy-the-dip opportunities.”
COINDREAM noted that despite Bitcoin’s modest rebound from recent lows near $80,500, traders have remained hesitant to use leverage.
“Excessive leverage often drags on market momentum. However, as prices have recently recovered, leverage levels have normalized, lowering systemic risk,” the contributor added.
CryptoQuant’s estimated leverage ratio—which measures open interest relative to BTC reserves—has also fallen significantly since mid-November.
