Fed Rate Cut This Week, Crypto Market On Watch As Bitcoin Faces Do or Die Situation

Bitcoin and the broader cryptocurrency market are showing a healthy uptick ahead of the Fed’s rate cut this week. With Fed pivoting towards quantitative easing (QE), optimism among traders is growing. BTC price is up 2.43%, trading at $91,500, with some market experts calling it a do-or-die situation.

Fed Rate Cut this Week Can Stir Crypto Market Sentiment

The cryptocurrency market sentiment has turned optimistic at the start of the second week of December, ahead of the Fed’s rate cuts. Experts are already pricing a 25 bps rate cut from Fed Chair Jerome Powell. Last week, on December 1, Powell officially ended the quantitative tightening measures.

Market reports indicate that starting in January 2026, the U.S. central bank will resume buying back $45 billion of debt each month. This marks the biggest ever liquidity injection in the market. Crypto market investors are already positioning themselves for this liquidity drift.

Market researchers at The Kobeissi Letter noted that the Fed’s balance sheet declined by $37 billion in November to $6.53 trillion. This is the lowest since April 2020.

Since QT began, the Fed has trimmed $2.43 trillion in assets. Thus, it unwound 51% of the $4.81 trillion accumulated during its pandemic-era quantitative easing. Holdings of U.S. Treasury securities fell by $4 billion in November to $4.19 trillion, the lowest since June 2020. Treasury holdings have now declined by $1.58 trillion, or 27.4%, from their peak in June 2022.

Mortgage-backed securities decreased by $16 billion last month to $2.05 trillion, the lowest level since November 2020. MBS holdings are down $687 billion from their 2022 high. With these reductions, the Federal Reserve has formally concluded its QT program.

Bitcoin In A Make-or-Break Situation

The Bitcoin price has remained range-bound and trading within the $84,000-$94,000 zone. Bloomberg analyst Mike McGlone calls it a “do-or-die” zone for BTC.

McGlone noted that Bitcoin’s key mean-reversion level sits near $50,100. This represents the average of its yearly highs from 2021 to 2023, as well as its 2024 low. Thus, a move above $94,000 would put Bitcoin positive for the year and could signal a broader recovery across risk assets.

Following today’s upside, BTC is once again showing signs of recovery as bulls eye a break past $94,000 resistance. Market analyst Ted Pillows reports that Bitcoin is once again moving into the $92,000–$94,000 resistance zone.

Pillows also highlighted an active CME gap near $89,500, which he expects to be filled this week based on current market conditions. Once BTC fills the gap, its next move depends on whether bulls can defend the $88,000–$89,000 support area.

Will Crypto Market See A Santa Rally Ahead?

Following the Fed rate cut decision on December 10, experts are hopeful of a Santa rally ahead for BTC. Analysts warn that any hawkish tone from Chair Jerome Powell could limit upside potential, despite growing expectations for policy easing.

A December 10 rate cut, combined with the formal end of quantitative tightening, is viewed as a potential catalyst for a “Santa rally.” This could set the momentum for a rally moving into 2026.

JPMorgan analysts led by Nikolaos Panigirtzoglou estimate that Bitcoin could climb to roughly $170,000 within the next 6–12 months.