Bitcoin could remain trapped in a tight trading band into late December if the Federal Reserve opts against cutting interest rates at its highly anticipated meeting next month, according to an analysis shared by XWIN Research Japan.
Key Takeaways:
Bitcoin may stay locked between $60K and $80K if the Fed holds rates steady in December. Falling cut expectations have already drained liquidity from risk assets, pushing Bitcoin below $90K. A record $72.2B in stablecoin reserves signals strong sidelined liquidity.The December FOMC is shaping up to be one of the most unpredictable in years.
After the US government shutdown forced the Bureau of Labor Statistics to cancel the October jobs report and delay both October and November data, policymakers will head into the meeting with limited visibility.
Fed Rate-Cut Odds Collapse to 40–50% as Officials Split
Rate-cut expectations, once comfortably above 70%, have now fallen into the 40%–50% range, with Fed minutes revealing a sharply divided committee.
A pause would signal that the Fed is wary of easing while inflation hovers near 3% and key labor indicators remain missing.
Historically, tight monetary conditions drain liquidity from risk assets, a pattern already seen earlier this month when falling cut expectations triggered sharp drawdowns across equities and crypto.
Bitcoin reacted immediately. As cut odds slipped, the asset fell below $90,000, erasing weeks of gains.
Analysts say the same dynamic is likely if the Fed stays cautious in December, with leveraged positions becoming more vulnerable in a low-liquidity environment.
However, beneath the surface, there’s fuel for a rebound. Stablecoin reserves on exchanges have climbed to an all-time high of $72.2 billion, according to the chart shared by XWIN.
Every major rally in 2025 has started with a similar build-up, sidelined liquidity waiting for a macro green light.
If no rate cut materializes, XWIN expects Bitcoin to consolidate between $60,000 and $80,000 through year-end.
Downward pressure comes from muted risk appetite, while upside remains capped until traders get clarity from the Fed.
The key question is whether stablecoin reserves stay parked or begin rotating into Bitcoin once the December policy risk passes.
Experts Reject ‘Crypto Winter’ Fears, Point to Stronger Market Foundations
Despite the recent pullback, several analysts have told Cryptonews that the current downturn looks more like a macro-driven correction than the start of a prolonged freeze, pointing to institutional adoption, regulatory progress, and sector resilience as signs the foundation remains strong.
Bitwise’s Danny Nelson and HashKey’s Tim Sun both argued that the market is far from a full-blown winter.
They noted that, unlike previous collapses, the current cycle has not seen a catastrophic event like FTX, and that infrastructure improvements, from tokenization to stablecoin expansion, continue to strengthen the ecosystem.
Other analysts highlighted that the absence of a euphoric peak and the impact of global liquidity make this downturn different from historical bear markets.
As reported, Bitwise Chief Investment Officer Matt Hougan has also urged investors to look past Bitcoin’s sharp pullback, arguing that the cryptocurrency’s long-term value has little to do with its recent slide and everything to do with the service it provides.
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