Bitcoin’s price has surged as the odds of a December rate cut spike to nearly 85%.
Open interest has dropped by $18 billion, flushing out excessive leverage.
The global markets have also recovered, highlighted by the S&P 500 nearing its highs.
The Bitcoin December rate cut narrative is gaining significant traction as BTC rebounds above $91,000.
With rate-cut probabilities surging, open interest resetting, and global markets ripping higher, Bitcoin is suddenly showing after weeks of weakness.
Given these changes, traders now want to know whether this bounce is a temporary relief or the start of a much larger breakout ahead of the December FOMC meeting.
Why Is Bitcoin Going Up?
Bitcoin’s price has surged by 13% since its low of $80,562 on November 21.
The charts show the exact point (green icon) where the trend shifted, which was a significant Fibonacci level.
Hence, if that happens with Bitcoin, the price could surge even higher to $98,000 – $103,400.
Therefore, traders are closely watching the resistance trend line, seeing that a breakout above it could accelerate the surge.
December Rate Cuts
The first reason for the Bitcoin price increase is the jump in odds for a December Fed rate cut.
According to the FedWatch Tool, the odds of a December rate cut have jumped to 84.95%.
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Analysts on X are quick to note just how bullish this is for the crypto industry, especially combined with the end of quantitative tightening on Dec. 1.
Previous history suggests that Bitcoin has historically pumped into an FOMC meeting, only to dump afterwards.
With the FOMC meeting set for December 9, the BTC price has more time to pump before another decline, if history is followed.
What could change this outlook is the size of the rate cuts.
While a 25-basis-point cut is expected, a 50-basis-point cut could send the markets soaring.
Open Interest Flush
Another reason for the Bitcoin price increase is a massive flush in the open interest.
Open interest had reached an all-time high of $46 billion at the October all-time high.
However, it has plunged to $28 billion in just 52 days, the biggest such drop this cycle.
gm CT$BTC rebounds above $91K as December rate cut odds rise.
Also, Bitcoin saw its largest Open Interest (OI) drop this cycle, plunging from $46B to $28B in just 52 days.
The move reflects a major long squeeze, flushing out over-leveraged positions and resetting the market.… pic.twitter.com/XH7CCImZSO
The S&P 500 prevented a breakdown from a long-term structure and is now breaking out from its own resistance.
As Bitcoin becomes increasingly correlated with traditional markets, the S&P 500’s recovery could lead to Bitcoin playing catch-up.
Where Are We Heading Next?
Bitcoin is gaining strength at exactly the moment when macro conditions are turning supportive.
Rate cut odds are rising, leverage has been reset, global markets are recovering, and technical indicators are showing early signs of a breakout.
However, BTC still faces key resistance near $98,000-$103,400.
A breakout above this zone could quickly open the door to new highs.
Either way, the Bitcoin December rate cut story will dominate the market over the next two weeks, and BTC’s next major move will likely be tied directly to the FOMC decision.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
