Bitcoin (BTC) is having what you might call a moment of truth. After touching $126,000 in October and briefly living the six-figure dream, the leading cryptocurrency has surrendered nearly 30% of those gains and now trades around $91,500. The question everyone's asking: can it climb back above $100,000 before the year ends?
That answer might come Wednesday, December 10, when Federal Reserve Chair Jerome Powell steps up to the microphone at 2:30 PM ET following the Federal Open Market Committee's final meeting of 2025. The Fed convenes December 9 and 10, and traders are positioning heavily for what comes next.
According to the CME FedWatch tool, markets are pricing in an 87% probability of a quarter-point rate cut. Over on Polymarket, a decentralized prediction platform, participants see a 93% chance of looser monetary policy. So the consensus seems pretty clear: traders expect accommodation.
But here's the thing about consensus trades in crypto. The current environment looks nothing like the euphoria that pushed Bitcoin past $100,000 just two months ago. The Fear and Greed Index, which measures market sentiment, has crashed to 23 out of 100. That's deep in "extreme fear" territory, signaling overwhelming pessimism among participants.
The numbers back up that anxiety. Bitcoin exchange-traded funds experienced significant outflows of $194.64 million on Thursday alone. BlackRock Inc.'s (BLK) iShares Bitcoin Trust accounted for $112.96 million of those withdrawals. Meanwhile, leveraged positions worth nearly $1 billion got liquidated during December's downturn.
Three Ways This Could Play Out
Market strategists are sketching out three distinct scenarios, each with dramatically different implications for where Bitcoin heads next.
The baseline expectation involves Powell delivering that quarter-point cut while projecting three additional reductions through 2026. Since markets have largely priced this in, any rally would probably prove modest and wouldn't immediately restore six-figure pricing. Think relief, not celebration.
The bullish scenario gets more interesting. If Powell surprises with an unexpectedly accommodative stance, that could provide the spark bulls have been waiting for. Tom Lee of Fundstrat, who's forecasting $150,000 for Bitcoin, argues that enhanced liquidity in 2026 will drive prices significantly higher. History supports this view: previous bull runs gained serious momentum when central banks flooded markets with fresh capital.
The bearish case, though, is where things get scary. If Powell signals fewer rate cuts than expected, panic selling could drive Bitcoin toward $70,000 or even $80,000 support levels. And here's what makes that particularly dangerous: the derivatives market is loaded with risk. Some exchanges offer 200x leverage, and there's currently $787 billion in open perpetual futures contracts. A cascading liquidation event could accelerate losses dramatically.
What to Watch Beyond the Rate Decision
December trading typically gets thin, which adds complexity to any price forecast. Technical analysts project Bitcoin oscillating between $85,000 and $95,000 absent a major catalyst. Limited market depth during holiday periods means even modest selling can produce exaggerated price swings.
This meeting carries extra significance because Bitcoin has diverged from conventional liquidity measures. The cryptocurrency recently breached its 10-month moving average for the first time in nearly four years, a technical breakdown that has chartists concerned.
Macroeconomic conditions complicate the picture further. While the Fed has reduced its benchmark rate to a 3.75% to 4.00% range, inflation remains stubbornly elevated. Core PCE, the central bank's preferred inflation gauge, continues exceeding the 2% target. A former Fed official recently warned that cutting rates while inflation hovers at 3% risks worsening fiscal imbalances.
The critical information extends beyond just the rate announcement itself. Pay attention to the revised Summary of Economic Projections, particularly the dot plot showing individual policymaker expectations for future rates. That will illuminate the 2026 trajectory. Upward inflation adjustments could prove especially damaging to speculative assets like Bitcoin.
Not everyone is pessimistic, though. Some analysts maintain optimism despite the current turbulence. Standard Chartered forecasts Bitcoin reaching $200,000 by early 2026, while Bernstein anticipates comparable levels fueled by ongoing ETF adoption and growing institutional participation.
With markets in suspense, the next 48 hours will determine whether Bitcoin can revive its $100,000 aspirations for 2025. For investors who've endured a 30% decline from October peaks, Powell's Wednesday remarks could signal either the beginning of a year-end rebound or confirmation that the bull market has shifted into a protracted consolidation period.