Some market experts warn that Bitcoin (BTC) might face a significant downturn ahead of the upcoming Federal Reserve meeting this week.
Markus Levin, co-founder of XYO, mentioned that a drop to $50,000 for Bitcoin is “within the realm of possibility” as market anxiety intensifies.
The Federal Reserve is set to decide on interest rate cuts on December 10th. Although lowering rates usually injects liquidity into markets and supports risk assets such as cryptocurrencies, Levin argues that the current market conditions may not be robust enough to benefit from this stimulus. Despite Bitcoin currently trading near $89,700, both technical analysis and sentiment indicators suggest a potential deeper correction.
Levin explained that “the fear and greed index has shifted towards extreme fear,” which raises the chances of a more pronounced pullback. He identified key support levels at $82,000 and then $78,000 for Bitcoin. However, if buying pressure weakens around these points, prices could fall below $70,000. Due to low liquidity in the market environment right now, even a temporary dip under $50,000 cannot be ruled out according to Levin.
The options market paints a somewhat different scenario. Data reveals that most short positions expiring on December 26th are clustered around an $85,000 strike price—indicating investors do not anticipate major short-term drops.
Georgii Verbitskii, founder of TYMIO, commented on Bitcoin’s fragile technical stance: “The uptrend structure has been broken.” He added it’s too early to dismiss further declines until BTC firmly surpasses the $100,000 mark. Verbitskii sees a possible retest near $70,000 while remaining below this threshold but believes breaking above it would significantly reduce downside risks.
Additional pressures stem from rising global inflation rates and capital outflows from Bitcoin ETFs—factors contributing negatively toward BTC’s price momentum.
Mike McGlone from Bloomberg Intelligence also highlighted potential volatility spikes in year-end trading sessions and forecasted that Bitcoin might trade under $84,000 by late 2025.
*Please note: This content does not constitute financial advice.*