Bitcoin Tests Key Fibonacci Support Amid FOMC Rate Cut Expectations
Bitcoin (BTC) is currently sitting on a critical 0.382 Fibonacci retracement support level, with analysts warning that a break below this could push BTC toward April lows near $76,000. Over the weekend, a liquidity flush briefly pushed BTC below $88,000 before it rebounded above $91,500. Intraday movements showed BTC dumping about $2,000 from $89.7k to $87.7k, triggering roughly $171 million in long liquidations, then rising about $3,500 to $91.2k with approximately $75 million of short liquidations. Analysts have described this weekend move as low-liquidity manipulation flushing both longs and shorts.
Currently, the market is focused on the upcoming Federal Open Market Committee (FOMC) meeting, where a 0.25% rate cut is widely expected. Despite ETF inflows softening and trading volumes thinning into December, which limits upside potential and increases near-term downside risks for BTC, bullish sentiment persists. Bulls point to potential liquidity windfalls from factors such as the Treasury General Account rebuild, the end of Quantitative Tightening (QT), and looming rate cuts. However, they note that market conviction and a supportive market structure are required for a sustained recovery.
If upcoming U.S. jobs data and inflation figures reinforce easing expectations, renewed liquidity could spur broader recovery across digital assets. On-chain data supports this outlook; the liveliness indicator is rising, signaling renewed underlying demand and possible re-entry by long-term holders despite subdued price action. Bitfinex has noted signs of seller exhaustion following deleveraging and described a developing stabilization and relief bounce.
