Bitcoin has surged past the $90,000 mark, marking a significant moment for investors who have been betting on a market rebound. This increase, observed today, has triggered a wave of short liquidations across multiple exchanges, leading to the elimination of bearish positions worth approximately $304 million. The overall cryptocurrency market capitalization has also witnessed a substantial boost, climbing by $127 billion to reach $3.07 trillion.
In total, more than 104,000 traders faced liquidation, predominantly those holding short positions. The recent upward momentum for Bitcoin has generated renewed optimism, suggesting that the market may have found a bottom after a period of volatility. This increase is the first time Bitcoin has exceeded $90,000 since November 20, signaling a potential turning point in the current market cycle.
Throughout the week, Bitcoin had been trading within the $86,000 to $88,000 range, while investors closely monitored macroeconomic indicators and awaited clearer signals from monetary policy. The breakthrough above $90,000, however, remains precarious as a struggle between bullish and bearish sentiments continues.
Interestingly, there are approximately $53 million in pending bull liquidations if the price of Bitcoin reaches $91,000. Conversely, a significant pool of long liquidations, estimated at over $150 million, could be activated if the price retraces to the $88,000 to $86,000 range, indicating a complex market dynamic.
As investors prepare for the upcoming Federal Open Market Committee (FOMC) meeting scheduled for December 10, macroeconomic policy is anticipated to play a crucial role in shaping market sentiment. Futures trading reflects a strong expectation of a 0.25% interest rate cut in December, suggesting a continued dovish stance from the Federal Reserve.
The CME FedWatch tool currently indicates an 85% likelihood that the Federal Reserve will adjust the target interest rate to a range of 3.50% to 3.75%. This sentiment has been bolstered by comments from Mary Daly, a prominent member of the Federal Reserve, who has expressed support for another rate cut, citing concerns over a weak labor market.
A potential rate cut could significantly impact risk appetite in the cryptocurrency market, particularly in light of other upcoming developments in December. The next two weeks will be critical as traders assess macroeconomic signals against year-end factors, including tax-related positioning.
