Bitcoin Attempts a Rebound as Investors Weigh Shifting Market Signals

Bitcoin is showing early signs of recovery after falling to just above $82,000 on Friday, marking its lowest level since mid-April. The coin has inched higher since then, with several market watchers suggesting that the sharp retreat may be easing.

Tech stocks and crypto assets slid over the past two weeks as traders kept changing their expectations around a potential rate cut, Capriole Fund founder Charles Edwards said on X. He noted that as this back-and-forth cools, Bitcoin may gain some lift.

Early Signs of Pressure Fading

Analysts at Swissblock said Bitcoin appears to be taking its first real step toward forming a base. They noted that their Risk-Off Signal is falling quickly, pointing to softer selling and a potential end to the worst phase of forced sales.

They cautioned that this week matters for monitoring traders’ selling behavior. In past cycles, a follow-up wave of selling often arrived after the first drop. This later phase is usually smaller and tends to hold the earlier lows. When it appears, it often signals that sellers are running out of drive and buyers are starting to step forward again.

TradingView data showed Bitcoin briefly touching $80,600 on Coinbase on Friday, placing its retreat from the early October high above $126,000 at about 36%. The bounce since then has helped steady nerves, though traders remain watchful.

Rate Cut Expectations Shift Again

Edwards also pointed out that forecasts for a Federal Reserve rate cut have swung sharply. Last week, the odds of a December cut slipped to around 30%. As of this week, they have climbed back to roughly 70%.

The CME FedWatch Tool currently places the likelihood of a 0.25 basis point cut at 69.3% for the December 10 meeting. Market commentators on X noted the quick change in expectations, with Global Markets Investor sharing a chart showing the flip on Polymarket.

Another commentator, “Sykodelic,” said they would not be surprised if the Fed uses the next meeting to address reserves, which could bring more liquidity into the system. They argued that the central bank will eventually need to inject funds to avoid broader financial strain.

Lower rates and an expanding supply of liquidity have often lifted risk assets in the past. Earlier periods of easy money created strong rallies across crypto, and traders are watching closely to see whether similar conditions could form again.