Bitcoin rallied on December 9 ahead of the latest Fed policy decision.
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Bitcoin prices rallied on Tuesday, December 9, approaching the $95,000 level as speculation surrounding Federal Reserve policy combined with other bullish factors to fuel gains.
The world’s most valuable digital currency rose to as much as $94,640.66, according to Coinbase data from TradingView. At this point, it was up more than 5% in under 24 h0urs.
Earlier in the day, the Federal Open Market Committee kicked off a two-day meeting, with many expecting these policymakers to cut the target range for the benchmark federal funds rate by 25 basis points. Such a move would likely be bullish for risk assets and conducive to economic expansion.
Investors will also be paying close attention to the press conference that Fed Chair Jerome Powell is scheduled to hold tomorrow afternoon. The guidance provided could have greater impact on asset values than a rate cut, claimed Nexo dispatch analyst Iliya Kalchev, asserting that markets have already priced in such a reduction.
Several analysts spoke to these developments, including Chris Robins, head of growth and strategic partnerships at Axelar, who stated via email that “Markets are moving in anticipation of tomorrow’s Fed decision, with investors betting on 2025’s third rate cut.”
“Bitcoin and other risk assets typically benefit from lower-rate environments,” he noted. “Combined with recent ETF approvals and improving regulatory momentum, conditions are increasingly attractive for institutional buyers.”
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Juan Leon, senior investment strategist at Bitwise Asset Management, also weighed in, focusing on the impact of both Fed speculation and several other factors.
“Bitcoin is rallying strongly today, surging over 5% in the last 24 hours to approach the $95,000 level,” he stated via email.
“This move is underpinned by a tangible improvement in liquidity conditions, driven by the Federal Reserve’s recent $13.5 billion repo injection and expectations for a rate cut at this week’s FOMC meeting,” said Leon.
“Crucially, the rally is being supported by a resurgence in demand from BTC ETP flows that have stabilized and turned net positive over the past two weeks, a reversal from the prior weeks of outflows,” he noted, focusing on inflows into these securities.
“The shift comes amid a sequence of announcements pointing to an acceleration in institutional adoption,” said Leon. “Key recent milestones include Bank of America’s approval of a 1–4% crypto allocation for wealth clients, Vanguard’s pivot to allow BTC ETP access, and PNC’s rollout of direct bitcoin trading for high-net-worth individuals.”
Crypto Derivatives Markets
Mark Pilipczuk, research analyst at digital asset benchmark provider CF Benchmarks, offered a different take on what fueled bitcoin’s latest gains, choosing to emphasize the role played by crypto derivatives markets.
“Bitcoin’s move higher today appears to be driven by macro repricing around the Federal Reserve interest rate decision and amplified by flows in the options market,” he said via emailed commentary.
“Fed funds futures continue to price in a rate cut at tomorrow’s FOMC meeting, but the curve notably shows no additional easing priced in until June,” said Pilipczuk.
However, current economic conditions are conducive to further rate cutes, he asserted, adding that “BTC is responding accordingly, as softer policy expectations continue to support risk assets.”
“Options positioning is also playing an important role,” noted Pilipczuk.
“In the most liquid short-term BTC options market, IBIT options expiring this Friday, BTC’s spot price has broken above the strike with the largest call open interest. This level is typically one where market makers are net short calls, meaning rising spot prices increase their hedging needs as call deltas climb,” he continued.
“To remain hedged, they are likely forced to buy additional spot BTC, adding upward pressure. These flows likely contributed to the rally observed during the first couple hours of the New York trading session today,” the analyst concluded.
Falling Selling Pressure
One analyst chose to focus on supply and demand, citing onchain data when claiming that major holders of bitcoin have been moving less of this cryptocurrency to exchanges in order to sell it.
“From the on-chain side, we are seeing lower selling pressure from large Bitcoin holders, as they have decreased their deposits into exchanges,” Julio Moreno, head of research for CryptoQuant, stated via Telegram.
“For example, the share of total deposits from large players have declined from a 24-hour average high of 47% in mid-November to 21% as of today,” he said.
The chart below illustrates these developments:
Large deposits of bitcoin flowing onto exchanges
CryptoQuant
“At the same time, the average deposit has shrunk 36% from 1.1 BTC in November 22 to 0.7 BTC currently,” added Moreno.
The chart below depicts this activity:
Average deposits flowing onto exchanges
CryptoQuant
A ‘Cautiously Optimistic’ Outlook
Going forward, one crypto hedge fund manager offered a bullish take. “Recent market developments suggest that Bitcoin has entered a more stabilized phase,” CK Zheng, cofounder and CIO of ZX Squared Capital, stated via email.
“The earlier pullback toward the $82K level appears to be part of a normal bottoming process, rather than a shift into a prolonged downtrend,” he said, referring to the decline that happened late last month.
“As the Federal Reserve is expected to start another rate-cutting cycle, overall liquidity conditions are likely to improve,” the analyst noted.
He emphasized how certain tech stocks can have a positive impact on cryptocurrency prices, stating that “The AI sector continues to demonstrate strong momentum.”
“Resilience in large-cap technology and AI-related equities typically enhances broader risk appetite, which can indirectly benefit crypto markets,” stressed Zheng.
He also downplayed concerns regarding digital asset treasury Strategy, noting that it has “recently raised approximately $1.4 billion to address its interest obligations, significantly reducing near-term liquidity pressure. As a result, concerns around potential systemic spillover from MSTR have eased at this stage.”
Zheng summarized the impact of these combined factors.
“Considering the macro policy trajectory, liquidity backdrop, and current market structure, we expect Bitcoin to potentially revisit the $100K–$120K range in Q1 2026. While certain short-term risks may still emerge, our long-term outlook for Bitcoin remains constructive and cautiously optimistic.”