The cryptocurrency market is feeling the jitters as it heads into a pivotal week, with Bitcoin experiencing a recent rollercoaster ride. In a volatile trading session on Tuesday, Bitcoin touched a high of $94,000 but slipped back to $92,500 early Wednesday morning amid cautious investor sentiment.
As market participants await the Federal Reserve’s final policy decision of 2025, there is growing anticipation surrounding potential monetary policy shifts. Current market indicators suggest a 90% probability that the Fed will implement a third consecutive quarter-point rate cut, which could impact not only stocks but also cryptocurrencies.
In parallel, U.S. stock futures are trading close to flat, with key indices like the Dow, S&P 500, and Nasdaq showing minimal movement ahead of the Fed’s announcement. This pause in the stock market reflects a broader trend of indecision as traders await clarity on interest rates. The upcoming press conference led by Fed Chair Jerome Powell, set for 2 p.m. ET Wednesday, is expected to provide crucial insights into future policy directions.
In terms of altcoin performance, Ethereum has been riding a wave of optimism, recording a 7% increase to around $3,320. Most notably, this brings its weekly gain close to 10%. Meanwhile, Cardano has posted an impressive daily rise of 8.5% as well.
However, the excitement in the altcoin market may be short-lived, as many tokens pulled back by 1-2% during early Asian trading hours, suggesting that traders sought to secure their profits after the recent uptick. XRP saw a slight increase of 2% over 24 hours but remained down 4% for the week, while BNB, USDC, and TRX showed flat trends. The overall market depth for smaller tokens is still comparably thin, marking a characteristic pattern for December trading.
All Eyes on the Fed Decision
As anticipation builds for the Fed’s rate decision, which is scheduled to be announced at 2 p.m. ET Wednesday, the market remains focused on the potential implications. Some FOMC members advocate for easier monetary policy to bolster a cooling labor market, while others caution against further easing, fearing it could stoke inflation.
“All eyes are on the upcoming Fed meeting as markets brace for either confirmation or a pivot in policy approach.”
Technical analysis indicates that Bitcoin is stuck in a range between $86,000 and $94,000, with Gracy Chen, the CEO of Bitget, noting that the market lacks sufficient anchors for a decisive breakout. Additionally, research analyst Mark Pilipczuk from CF Benchmarks has highlighted a notable volatility spike, with realized volatility recently surpassing implied volatility for the first time in months. Historically, such events have often preceded significant price movements.
Although Bitcoin managed to maintain a position above $93,000 for a time, its late Asian trading performance has led to debates among analysts. They are weighing whether this pullback is technically significant or simply a stop-hunt within the established range.
In a brief rally above $94,000, social sentiment surged, reflected in blockchain analytics, which indicated a resurgence of optimism among traders who were hopeful for further price increases. However, this sentiment rapidly cooled following the reversal in prices, leaving Bitcoin vulnerable ahead of the Fed’s decision.
The outcome of the Fed’s decision could have far-reaching consequences for both the stock and crypto markets, making Wednesday’s announcement one to watch closely.
