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Bitcoin rebounds but FOMC will set tone for Santa rally

Bitcoin has rebounded to its highest price since mid-November, crossing $94,000 ahead of the Fed’s expected rate cut today. The asset is increasingly trading within a macropolitical supercycle in which liquidity conditions, regulatory decisions, and the portfolio strategies of major institutional holders outweigh miner-driven supply mechanics, according to Farzam Ehsani, CEO of VALR.

While the upside move “rekindled risk appetite,” a sustainable recovery now hinges on the Fed’s policy language, Timothy Misir, head of research at Blockhead Research Network, said. 

Bitcoin is down 5.9% on the year and 27% from its October 6 all-time high.

“If the Fed cements a dovish path with ongoing liquidity support, the path back to the $96k–$106k bands becomes plausible. If not, expect rapid retest of the mid-$80k area,” Misir said.

Meanwhile, bitcoin ETFs saw $151.74 million in inflows on Monday, the largest inflows since November 21, SoSoValue data shows.

Gracy Chen, CEO of Bitget, echoes the sentiment, saying that bitcoin’s consolidation in a broad $86,000 to $94,000 range shows a market that doesn’t have enough anchors to make a decisive move.

“A rate cut could make BTC rise back toward $94,000–$96,000. By contrast, a cautious move [by the Fed] could send it into the $80K range again,” she said.

Looking ahead, Nic Puckrin, cofounder of Coin Bureau, said that despite yesterday’s rally, bitcoin was rejected from the critical resistance level of $94,000, reflecting prevailing fears that the FOMC will announce a hawkish cut today.

Puckrin said that could reduce the likelihood of a Santa rally for bitcoin and that it may well finish 2025 under $100,000.

“Momentum hasn’t been on bitcoin’s side lately,” he said.

However, he said the markets could “very quickly switch from depression to euphoria in 2026,” particularly if ultra-dovish Kevin Hassett replaces Powell.

“So bitcoin’s new all-time high likely hasn’t been canceled — just postponed,” he said.

Finally, Standard Chartered analysts lowered their bitcoin price expectations, deeming the moment “not a crypto winter, just a cold breeze.”

Going forward, the analysts expect ETFs to be the key drivers of bitcoin price, as “bitcoin buying by DATs has run its course.”

They halved their previous 2025 and 2026 forecasts to $100,000 and $150,000, respectively.

They also “expect bitcoin to reach our long-term price forecast of USD 500,000 only in 2030 (versus 2028 previously).”

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New bitcoin AfterDark ETF will be bitcoin at night, Treasurys by day

Tidal Trust II submitted form N-1A with the SEC to register a bitcoin ETF designed to systemically capture the cryptocurrency’s overnight return profile, a time window that delivered a significant portion of bitcoin’s upside last year.

The Nicholas Bitcoin and Treasuries AfterDark ETF provides long bitcoin exposure during US overnight hours, from the closing bell until the following morning’s market open, when the fund intends to unwind its positions, according to a document filed with the SEC on Tuesday. 

To gain that exposure, the ETF may use a number of methods, including bitcoin futures contracts, US-listed ETFs, or exchange-traded options on such bitcoin underlying funds. When the market is open and daytime trading is active, the fund’s portfolio will consist of US Treasury securities and other cash equivalents. 

In 2024, most of bitcoin’s gains occurred after-hours, senior Bloomberg ETF analyst Eric Balchunas reported:

The AfterDark ETF filing comes as bitcoin crossed $94,000 on Tuesday, rising 4.5% in the last 24 hours. Even though spot bitcoin ETFs saw nearly $60.5 million in outflows on Monday, the investment vehicles have a cumulative net inflow of $57.6 billion, per SoSoValue.

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