Bitcoin faces critical weeks ahead; Fed’s rate call could spark a major reversal or extend stagnation as BTC slips under its 10MMA for the first time in 46 months.
Expectations are rising for a rate cut at the upcoming Fed meeting, as traders on Polymarket are now almost certain the Federal Reserve will lower rates by 25 basis points.
Just two weeks ago, the market was split on whether the Fed would act, but recent events and Fed comments have shifted sentiment strongly toward a cut.
Before November 20, after the last 25 bps cut, Fed Chair Jerome Powell called the December decision “an open question,” and many expected the Fed to pause. But delayed reports from September changed the picture: the economy added 119,000 jobs, but unemployment rose to 4.4%, past months’ numbers were revised down, and labor participation stayed low. Experts call this “stall speed.” The labor market is slowing down, but not collapsing.
Market expectations jumped after Fed Governor Christopher Waller said on November 24, “there are no signs of a recovery,” hinting he favors a December cut. Other officials, like Mary Daly and John Williams, suggested rates should not stay high longer than needed, and delayed data is a reason to act. Polymarket prices for a cut shot up from 65¢ to 84¢ in a day.
Still, there’s a 12% chance the Fed keeps rates unchanged. Strong data, like higher job growth or rising wages in Friday’s report, could change expectations quickly. Powell has the flexibility to wait and see, and his careful messaging shows he knows how to guide markets without causing panic.
Political voices, including President Trump, are also calling for bigger rate cuts, though the Fed typically does not respond directly to politics.
As the Fed’s interest rate decision approaches, markets are watching closely. The December meeting promises to be important, with data, Fed guidance, and market reactions all shaping expectations.
Bitcoin is in a waiting game as the crypto market watches the Fed closely. BTC price has completely detached from M2 supply and is likely to consolidate between $90,000-$120,000 until the Fed starts injecting liquidity next year.
If the Fed holds off on a December rate cut, BTC could remain trapped in the $60K-$80K range through year-end. Stablecoin reserves on exchanges have hit new highs, and every major BTC rally in 2025 began after similar accumulation periods, showing liquidity is ready.
However, BTC’s monthly close under the 10-month moving average (10MMA) for the first time in 46 months is a bearish signal. The FOMC meeting on December 9-10 could trigger either a major reversal or continued stagnation, impacting the entire crypto market.
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