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Bitcoin faces a potentially range-bound December as the probability of a Federal Reserve rate cut has collapsed from 70% to between 40% and 50%, according to CME Group data.
The sharp reversal in market expectations comes as Fed officials signal deep division over monetary policy direction, with missing labor market data from October’s government shutdown complicating the decision ahead of the December FOMC meeting.
Bitcoin bulls hoping for a strong year-end rally may be disappointed. The once-dominant 70% probability of a Fed rate cut has now plunged to between 40% and 50%, according to CME data and recent Fed minutes showing a fractured committee.
“A December Fed rate cut is far from guaranteed. Policymakers are flying half-blind,” said Sarah Mitchell, Senior Economist at Apollo Macro Research, pointing to the missing labor data after the US government shutdown halted October reporting. “The Fed wants clarity, and right now, they don’t have it.”
The lack of visibility not only weakens the case for a Fed rate cut, but strengthens the argument for another pause as inflation hovers stubbornly near 3%.
Tight monetary policy is historically bearish for risk assets—and analysts say crypto is no exception. The fading odds of a Fed rate cut have already triggered sharp volatility earlier this month, as leveraged positions unwound and liquidity thinned.
“When Fed rate cut expectations fall, crypto usually feels it first,” said Michael Reynolds, Head of Digital Asset Strategy at FalconX. “Liquidity evaporates, funding rates swing, and traders retreat to stablecoins.”
This dynamic, experts say, strengthens the case for Bitcoin remaining capped beneath $80,000 until the Fed provides clearer guidance.
But there is a bullish twist beneath the caution. Stablecoin reserves on exchanges have surged to an all-time high of $72.2 billion, indicating immense sidelined liquidity waiting for the right moment to strike.
Every major crypto rally in 2025 began with a similar buildup, according to XWIN Research Japan.
“A delayed Fed rate cut might keep Bitcoin range-bound, but it can also supercharge the next breakout once macro conditions flip,” said Kenji Watanabe, Lead Analyst at XWIN Research Japan.
XWIN expects Bitcoin consolidation to continue in the $60,000–$80,000 zone if the Fed maintains its cautious stance next month.
Despite market jitters, industry leaders are pushing back against fears of another crypto winter.
“This is not 2022. This is a macro-driven correction, not a structural breakdown,” Danny Nelson of Bitwise told Cryptonews. “The absence of a Fed rate cut is creating pressure, but the market’s underlying health is significantly stronger.”
HashKey’s Tim Sun echoed the sentiment, saying: “The ecosystem has evolved. Tokenization, stablecoin expansion, institutional on-ramps—these factors make the current environment resilient even without an immediate Fed rate cut.”
Several analysts highlighted that unlike past bear markets, the current cycle hasn’t seen catastrophic failures on the scale of FTX, and there is no euphoric top to unwind.
Bitwise CIO Matt Hougan urged investors to zoom out, emphasizing that the long-term case for Bitcoin remains intact—regardless of the timing of a Fed rate cut.
“Bitcoin’s value proposition isn’t tied to short-term macro swings,” Hougan said. “Its long-term trajectory has everything to do with the service it provides as a global, censorship-resistant asset.”
