Bitcoin Faces Rejection at $93.5K as Fed Rate-Cut Anticipations Meet Bearish Sentiment

Bitcoin rejects at key $93.5K as Fed rate-cut bets meet 'strong' bear case

Summary: Bitcoin's price struggles as it hits a critical resistance level of $93.5K. Despite positive US labor market data, there are strong expectations for a Federal Reserve rate cut in December, as the market shows a divergence between cryptocurrencies and stocks. Bitcoin must reclaim several key resistance levels to shift the bearish outlook.

Key Takeaways:

Positive labor-market data in the US does not dampen expectations for a Federal Reserve interest rate cut in December.
Cryptocurrencies, including Bitcoin, are diverging from the stock market amid forecasts of a robust finish for stocks in 2025.
Bitcoin has essential resistance levels to overcome to change its current bearish trend.

Federal Reserve's Dilemma on Rate Cuts

Recent analysis from Cointelegraph Markets Pro and TradingView highlighted weakening price action for Bitcoin (BTC) amid unexpectedly low jobless claims in the US.

Federal Reserve, Bitcoin Price, Markets, Market Analysis

According to data from the St. Louis Fed, both initial and ongoing jobless claims were lower than anticipated.

US weekly initial jobless claims through Nov. 29. Source: St. Louis Fed

Despite these indications of a robust labor market, markets are increasingly convinced that the Federal Reserve will reduce interest rates in their meeting scheduled for December 10. Analysts suggest this belief stems from the widening disconnect between risk assets and consumer strength.

“The Fed has no option: Even as inflation hits 3%, the Fed MUST cut rates to ‘save’ US consumers,” stated The Kobeissi Letter in a recent commentary on X.

Fed target rate probabilities for Dec. 10 meeting (screenshot). Source: CME Group FedWatch Tool

Such a cut would potentially facilitate increased liquidity in cryptocurrencies and other risk assets. Cointelegraph noted that even the challenges posed by Japan's anticipated rate hike conflicted with its recent $135 billion economic stimulus strategy.

Kobeissi referred to Japan's economic situation as a “free-for-all,” pointing out the paradox of printing stimulus while simultaneously raising rates.

Japan 30-year bond chart. Source: The Kobeissi Letter/X

Despite the optimism about potential Fed rate cuts, trading firm Mosaic Asset Company cautioned that outcomes are far from guaranteed. “While market-implied odds suggest an 89% chance of a third consecutive rate cut, significant divisions remain on the future direction of interest rates,” they noted in a blog post.

Bitcoin Remains in a Strong Bearish Case

While the S&P 500 is only 0.5% away from reaching new all-time highs, Bitcoin and other altcoins continue to show weakness.

Among traders, several resistance levels must be reclaimed to establish a more bullish stance. Key challenges include the $93,500 yearly opening, liquidity levels near $100,000, and the 50-week simple moving average (SMA) and exponential moving average (EMA).

“Looking for a retest at the 50-Week SMA, but we need to clear resistance in the $96k - $98k range first,” said trading resource Material Indicators to their X followers, sharing insights based on Binance order-book liquidity data.

BTC/USDT order-book liquidity data with whale transactions. Source: Material Indicators/X

In a follow-up post, Material Indicators emphasized that Bitcoin's failure to overcome the yearly open is a strong indicator that the bearish thesis remains firmly in place. Earlier, Cointelegraph had reported on various BTC price indicators illustrating the market's ongoing bearish phase.