Bitcoin began mid-week trading with renewed momentum, climbing back toward the $94,000 region as markets absorbed the U.S. Federal Reserve’s quarter-point rate cut and its cautious economic tone.
After a choppy November and early December, the latest rebound reflects improving risk appetite while traders await confirmation of trend direction.
Key Takeaways
Bitcoin rebounded toward $94,000 following the Federal Reserve’s quarter-point rate cut.
Fed officials warned of elevated inflation risks and a cooling labor market, keeping sentiment cautious.
Technical indicators show improving momentum, with RSI stabilizing and MACD turning upward.
Derivatives data revealed over $63M in liquidations, mostly targeting shorts, supporting the price move higher.
The world’s largest cryptocurrency currently holds a market capitalization near $1.87 trillion, supported by 24-hour trading volume above $63 billion, pointing to healthy market participation.
Fed Rate Cut Fuels Sentiment — but Message Remains Cautious
The Federal Reserve’s decision to trim rates by 0.25% aligned with expectations, but policymakers signaled a more complex path ahead. Chair Jerome Powell acknowledged that economic growth is moderating and that the labor market is cooling, while inflation pressures remain elevated. Fed officials also warned that unemployment risks have risen and noted that inflation risks are tilted to the upside, suggesting policy flexibility will remain constrained.
Bond market reaction was restrained, but crypto traders interpreted the move as marginally supportive for risk assets, especially with funding conditions easing — albeit cautiously.
Price Action Shows Recovery Attempts
Bitcoin’s daily chart reflects gradual stabilization after November’s sharp drop below $90,000. The latest bounce toward $93,600 shows buyers defending higher lows — a structure indicating weakening downside pressure.
Technical indicators signal tentative improving momentum:
The RSI reading near 52 suggests momentum has exited oversold territory without yet entering overbought levels — a constructive signal for accumulation phases.
The MACD lines are crossing upward, hinting at a potential shift toward positive momentum after weeks of bearish flow.
Still, traders remain wary. Market swings remain fast, and sentiment is tied closely to macro narratives and ETF flow performance.
Derivatives Market Offers More Clues
BTC liquidation data shows $63.87 million in positions wiped out, with shorts ($36.54M) exceeding longs ($27.33M). The imbalance highlights traders being caught on both sides but confirms short sellers faced more pressure — aligning with Bitcoin’s upward movement.
The liquidation tilt often suggests early trend reversal behavior, where short squeezes help fuel upside momentum as trapped positions unwind.
What’s Next — Can Bitcoin Break Higher?
Bitcoin is still trading below major psychological and technical resistance levels between $95,000 and $100,000. Traders are watching whether improved macro liquidity and the Fed’s first step toward monetary easing will be enough to drive a stronger breakout.
If momentum holds and ETF flows stabilize, BTC could challenge the $95K–$97K region. Conversely, failure to hold higher lows may invite renewed selling pressure back toward $90K.
For now, the combination of lighter rate policy, stabilizing indicators, and short-side liquidations sets a constructive foundation — but markets remain cautious, mirroring Powell’s tone.
