Caution sets in on the markets. In just a few weeks, investors saw their hopes for monetary easing disappear while Bitcoin lost its momentum. But does this correction herald a simple decline or the start of a real bear market?
In brief
- The odds of a Federal Reserve rate cut in December have fallen to 33%, from 67% in early November.
- Bitcoin has lost key support at $90,000 and now displays a “death cross” on its technical chart.
- The Crypto Fear and Greed Index is stagnating at 16, signaling “extreme fear” among investors.
- Analysts anticipate a possible descent of BTC towards $75,000 before a potential rebound at the end of 2025.
The Fed changes course and sows doubt in the markets
The situation has changed radically in a few weeks. In mid-November, 67% of the market still anticipated a 25 basis point cut at the December FOMC meeting.
Today, that probability has plummeted to just 33% according to data from the Chicago Mercantile Exchange. A sudden turnaround which can be explained by Jerome Powell's cautious statements and the unexpected resistance of inflation.
Forecasting platforms like Kalshi and Polymarket show slightly more optimistic figures — 70% and 67% respectively — but the general trend remains the same. Operators have doubts. Inflation is not falling as quickly as expected, and the Fed could well maintain its restrictive policy longer than expected.
This monetary hesitation is hitting the crypto market hard. Digital assets, considered particularly sensitive to liquidity conditions, suffer directly from this tightening of expectations.
“ The Fed stimulates the economy amid a bubble », Warned Ray Dalio recently, pointing out the risks of a poorly calibrated policy in the face of historically high asset prices.
For Bitcoin investors, the message is clear: no monetary catalyst can be expected in the short term. The October rate cut had already been incorporated without causing a significant rebound. That of December, now uncertain, can no longer serve as a lifeline.
Bitcoin wobbles, alarming technical signals and sentiment at its lowest
The price of bitcoin tells a worrying story. Since Wednesday, the first crypto has lost the psychological threshold of $90,000 and is now moving around $89,000. Even more concerning, BTC has been trading below its 365-day moving average for six consecutive days, a support level usually considered critical.
Technical indicators are accumulating in the red. The 50-day exponential moving average has just crossed downwards that of 200 days, forming a “death cross”.
This classic bearish signal suggests a likely continuation of the correction. Benjamin Cowen, a respected industry analyst, sums up the situation:
If the cycle is not over, Bitcoin could rebound as early as next week. Otherwise, expect another drop before a rally towards $75,000.
Investor sentiment confirms this deleterious atmosphere. The “Crypto Fear & Greed” index stagnates at 16 out of 100, reflecting widespread “extreme fear”. This level is barely a point above the annual low previously recorded. Bitcoin ETFs suffered $1.1 billion in net outflows, a sign that even institutional investors are now erring on the side of caution.
The crypto market is entering a zone of prolonged turbulence. Without immediate monetary support and with degraded technical indicators, bitcoin could continue to consolidate in the coming weeks. The most pessimistic are already talking about a possible “mini bear market”, while the optimists are betting on a rebound by the end of 2025. One certainty remains: uncertainty reigns supreme.
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