Bitcoin is trading near a technical level that analysts say must be protected to prevent a deeper market decline. According to analyst Daan Crypto Trades, BTC is hovering around the 0.382 Fibonacci retracement level, a widely watched indicator that often marks major support and resistance zones during market cycles. “I think this is a key area for the bulls to defend,” he said, noting that a drop below the threshold could send Bitcoin back toward its April lows around $76,000. He warned that such a fall would “break this high time frame market structure,” a scenario traders are trying to avoid. Weekend Volatility Signals Continued Instability Late Sunday, Bitcoin experienced another sharp leverage flush as both long and short positions were liquidated during low-liquidity trading hours. The asset briefly fell below $88,000 before rebounding back above $91,500. “This is another example of manipulation on the low-liquidity weekend to wipe out both leveraged longs and shorts,” said a trader known as “Bull Theory.” The rapid swings highlight the vulnerability of crypto markets to sudden movements, especially during weekends when trading volumes decline. Fed Meeting Expected to Shape Near-Term Direction Investors are preparing for this week’s Federal Open Market Committee meeting, where policymakers are widely expected to announce a 0.25% rate cut. However, analysts say the tone of the accompanying guidance may matter more than the rate move itself. Since the October cut, crypto markets have lost momentum, with Fed Chair Jerome Powell signaling a “non-linear, data-dependent easing path rather than a clear-cutting cycle,” according to Markus Thielen of 10x Research. Market Awaits Outlook Statement for 2026 Thielen noted that expectations now point to another 25-basis-point cut on December 10, followed by cautious language that may weigh on risk assets through the end of the year. “With volumes already depressed and ETF flows negative, upside participation remains thin while the $70,000–$100,000 BTC range holds,” he said. Implied volatility is also tightening, which he believes leaves downside risk more prominent in the near term. Analysts Eye 2025 and 2026 for Potential Momentum Henrik Andersson of Apollo Capital said a rate cut this week is already priced into the market, but the outlook statement will determine what comes next. He said he remains cautiously optimistic for 2026, as the expected replacement of the Fed chair in May could lead to additional cuts next year. “With the Fed chairman being replaced in May next year, we will likely get more interest rate cuts in 2026, which should be supportive for risk assets, including crypto,” he said. Economic Data Could Unlock New Liquidity Nick Ruck of LVRG Research said upcoming jobs and inflation figures will also influence market direction. He argued that stronger-than-expected data could encourage renewed liquidity flows into crypto. He added that this, combined with the Fed’s policy guidance, “could unlock renewed liquidity inflows and propel a broader market rebound if they align with expectations for continued monetary easing.”
