Bloomberg Analyst: Bitcoin Could Drop Below 84,000 USD! Bulls Stunned by "Hawkish Rate Hike," Christmas Rally Spoiled

The Federal Reserve’s rate cut triggers Bitcoin leverage liquidation, with 24-hour long positions爆仓 $380 million. Multiple analysts point out that reduced liquidity may lead to a market downturn by the end of December.
(Background recap: Bitcoin liquidity has been reshaped—“old indicators” may have failed, the market may need a new set of glasses)
(Additional background: Bitcoin surges then falls below $91,000; what did Powell say after the Fed cut interest rates by 1 basis point?)

“Sell the News” occurs again in the Bitcoin market. The Federal Reserve cut rates by 25 bps as scheduled in the early morning of December 11, but Bitcoin briefly touched $94,500 before plunging. Long liquidation within 24 hours reached $380 million, while short positions were only $138 million. The domino effect of leveraged long positions being wiped out has quickly cooled market expectations of reaching $100,000 by year-end.

Leverage Liquidation: Above 90K Becomes a Trap for Longs

On Tuesday and Wednesday, the price attempted twice to break through $94,000. These attempts appeared as false breaks. Retail traders chased the high, only to be forced to close positions and get crushed. FxPro analyst Alex Kuptsikevich told CoinDesk,

Although Bitcoin made a local high, the overall market cap remains stuck below $3.32 trillion, with no new capital inflows. In the short term, it’s just intra-market capital battles.

Hawkish Rate Cut: Liquidity Expectations Fall Short

The Fed announced a rate cut in its policy statement, but the latest dot plot suggests fewer rate cuts in the next two years. The Trump administration’s first-year push for fiscal expansion led to rising inflation pressures, shifting the policy stance from dovish to hawkish. QCP Capital reports:

Reduced liquidity and imbalanced positions cause Bitcoin to oscillate between $84,000 and $100,000, with momentum for a one-sided trend already exhausted.

Global crypto market cap drops back to $3.16 trillion. Ethereum, despite forming a head-and-shoulders pattern technically with a target of $3,700, is dragged down by Bitcoin’s decline, with buying appetite waning significantly. High-beta tokens like Dogecoin and Solana also decline synchronously, indicating market risk appetite is cooling rapidly.

Bloomberg Intelligence strategist Mike McGlone states that if liquidity continues to contract, the “Christmas rally” may be absent, and Bitcoin could potentially fall below $84,000.

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