As talk of the “Santa Rally” began, Bitcoin (BTC) started at over $90,000 in the second week of December.
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BTC price action is focused on a key resistance area in the low $90,000 range, but traders still expect further declines to come.
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Federal interest rate decision week is impacting risk assets despite the broad consensus that interest rates will be cut.
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Analysts agree that the Fed’s decision will decide the fate of the stock rally.
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In the case of Bitcoin, seasonality suggests that the bottom of this year’s “bear market” could coincide with 2022.
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Open interest and leverage remain subdued, although there could be light at the end of the tunnel for bulls.
Fibonacci level is the important lower limit for BTC price
Bitcoin price volatility has returned to weekly closes, a pattern seen more and more often this quarter.
BTC/USD managed a weekly close near the $90,000 mark after falling to nearly $87,000 before moving even more volatilely on shorter time frames, data from Cointelegraph Market Pro and TradingView confirmed.
Traders were wary of false movements in both directions.
In his latest X thread on BTC, trader CrypNuevo focused on the 50-day exponential moving average (EMA) as a potential retest target.
“In terms of shorts, we are looking for a retest of the 1D50 EMA, but we think it will correct around $95.5k and reach the top of the range,” he predicted.
CrypNuevo said Bitcoin lacks a “clear foundation” to go long, and the low $80,000 zone is still on the table.
“There will be some liquidation in both directions, but the zone between $94,500 and $95,000 will see a bit more upside. If price gets there first, we’ll be looking for a short signal to a potential retest of the low $80s,” he added, alongside a chart of the exchange’s order book liquidity data.
Cryptocurrency trader, analyst, and entrepreneur Michael van de Poppe was more hopeful, citing “intense” pressure among Bitcoin buyers at local lows.
“Given such intense buying pressure is occurring, we expect it to break to the upside and sustain above $92,000 in the coming days,” he told X Followers on Monday.
“As a result, it will rise towards $100,000 by 2026.”
On the downside, trader Daan Crypto Trades flagged a bullish line using Fibonacci retracement levels. This is $84,000, the level at which retesting will begin in December.
“It remains in the 0.382 region of the entire bull market to date,” he wrote in an accompanying analysis.
“I think this is an important area for the bulls to defend. This is also almost the last major support before retesting the April lows which would break the market structure on this higher timeframe.”
FOMC week leaves Fed short on labor market
This week’s release of US macroeconomic data means the focus is purely on the Federal Reserve.
The Federal Open Market Committee (FOMC) will meet on Wednesday to decide on interest rate changes, and the market is betting on a 0.25% rate cut.
Recent employment data shows a deteriorating labor market, further increasing the need for rate cuts. The analysis shows the Fed is caught in the middle because inflation remains a problem and rate cuts will make it worse.
“Nonfarm payrolls have declined five times in the past seven months, the worst streak in at least five years,” trade information site Kobissi Letter wrote as part of a weekend X post on U.S. jobs numbers.
“The deterioration of the job market is accelerating.”
Analytical resource Mosaic Asset Company struck a more optimistic tone, seeing it as an ideal combination of tailwinds for risk assets.
“With inflation above target, the economy holding up well, and the S&P 500 index nearing record highs, we expect the Fed to cut interest rates for the third consecutive meeting,” the board wrote in the latest edition of its regular newsletter, The Market Mosaic.
Mosaic added: “With the economy showing signs of continued growth, we can’t think of a more bullish situation that would help lift the stock market more than a rate cut with accommodative financial conditions supporting the earnings outlook.”
Meanwhile, on the day of the FOMC, markets will be watching closely for signals about the future policy trajectory when Federal Reserve Chairman Jerome Powell speaks after announcing interest rates and takes questions from reporters.
Koveisi this weekend described Powell’s dismissal of the “stagflation” risk at the May 2024 FOMC press conference as “the day the Fed lost control.”
May 4, 2024: The day the Fed lost control.
Fed Chairman Jerome Powell responded to concerns about stagflation by saying, “I don’t see either stagflation or flatflation.”
Eighteen months later, inflation is still above 3% and the labor market is at its weakest level since the pandemic.
own assets. pic.twitter.com/gpBdXnfH7Y
— Kobeissi Letter (@KobeissiLetter) December 6, 2025
Santa rally topic becomes Fed proviso
If stocks are looking for the perfect cocktail of bullish catalysts to end the year, crypto pundits are already discussing the possibility of a “Santa Rally” spillover.
The Santa Rally is real, but the timing is inconsistent.
Will Santa Rally be held this year? 👇 pic.twitter.com/YnsAjXqBbx
— Mister Crypto (@misterrcrypto) December 6, 2025
As reported by Cointelegraph, cryptocurrencies have significantly underperformed stocks in the fourth quarter, with the S&P 500 just shy of a new all-time high.
Network economist Timothy Peterson said stars tend to focus on Bitcoin towards the end of the year.
Among those taking a contrary stance is Joanne Wesson, founder and CEO of crypto analysis platform Alphactal. He claimed that BTC/USD is scheduled to end “sideways” by 2025.
“Each year, Bitcoin spends an average of 170 days in negative territory,” Wesson explained, along with a graph of the cumulative number of negative trading days for the BTC price.
“171 negative days have already accumulated in 2025. This strongly suggests that the year is likely to end in a flat price range. If a deeper decline is to come, it will most likely occur in 2026.”
Earlier, Cointelegraph reported that Santa’s outcome remains at the mercy of the Fed.
“The S&P 500’s decline in late October and November occurred in tandem with declining odds of another rate cut this month. Recent comments from key Fed officials helped push up the odds of a rate cut, which in turn triggered a stock market recovery,” agreed Mosaic Asset Company.
Is $89,000 the new $16,000 in Bitcoin?
When it comes to Bitcoin price cycles and seasonality, the latest data gives bulls reason to remain confident in the outlook.
A comparison of BTC/USD this year and 2022-2023, uploaded to X this weekend by Peterson, suggests that the long-term price bottom should be complete or just around the corner.
In late 2022, Bitcoin bottomed out at a multi-year low of $15,600 after a brutal bear market that saw it drop 80% from its all-time high.
That pullback will begin as soon as 2023 begins, and if history repeats itself, Hodler may have to wait just a few weeks for upward momentum to return.
“$89,000 is the new $16,000,” Peterson summed up.
As Cointelegraph reported, comparisons to 2022 have become more frequent since October, when Bitcoin abruptly abandoned its streak of new highs and fell 36% in six weeks.
In late November, Peterson said the price correlation to 2022 reached 98% in a monthly time frame.
Open interest reveals Bitcoin’s ‘indifference’
Encouraging signals from the Bitcoin derivatives market are starting to allow for a real market rally.
Related: Bitcoin profit indicator focuses on 2-year low “complete recovery”: BTC analysis
New data from on-chain analytics platform CryptoQuant has confirmed that open interest (OI) across Bitcoin exchanges has fallen to its lowest level since April, when BTC/USD traded at $75,000.
“This decline typically reflects two things: 1) investor capitulation or 2) investor apathy,” contributor COINDREAM commented in one of CryptoQuant’s Quicktake blog posts on Monday.
“Historically, periods of apathy and low participation have often presented attractive buy-in opportunities.”
COINDREAM noted that even though BTC price has rebounded slightly from the recent low of $80,500, traders are not tempted to use leverage.
“Excessive leverage is typically a disabling factor in market direction. However, as prices have recently recovered, leverage levels have normalized and systemic risk has been reduced.”
CryptoQuant’s estimated leverage ratio metric, which is OI divided by BTC reserves, has declined significantly since mid-November.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
