Bitcoin is currently positioned at a vital technical support level that must be maintained to avert significant declines, cautioned crypto analyst Daan Crypto Trades.

This concern revolves around the 0.382 Fibonacci retracement zone, identified as a major support and resistance point within market cycles.

“I believe this is a crucial area for the bulls to defend,” he noted, advising that a dip below this level could see Bitcoin (BTC) plummet to approximate April lows of $76,000.
“It’s essentially the last notable support before retesting the April lows, which would disrupt the high timeframe market structure.”

Later on Sunday, Bitcoin experienced another short leverage flush, leading to liquidations of leveraged positions on both sides. The cryptocurrency briefly dipped below $88,000, before bouncing back above $91,500.

“This is another instance of manipulation in a low-liquidity weekend designed to eliminate both leveraged long and short positions,” commented Bull Theory.

BTC is trading at a key support/resistance zone. Source: Daan Crypto Trades

All Eyes are on the Fed Meeting This Week

The Federal Open Market Committee will meet on Tuesday and Wednesday to decide on interest rates, with a 0.25% decrease widely anticipated.

The cryptocurrency marketplace has been losing momentum since October as Fed Chair Jerome Powell signaled a more nuanced, data-driven approach rather than a straightforward cutting cycle, according to 10x Research head Markus Thielen in a note shared with Cointelegraph.

“The market now expects a reduction of 25 basis points on December 10, followed by a cautious tone, mirroring October’s hawkish execution and sustaining slight pressure as the year concludes.”

Fed Outlook Statement Will Be Crucial

Apollo Capital’s Henrik Andersson reiterated this sentiment, expressing to Cointelegraph that a Fed rate cut this week is already captured in market pricing, but the outlook statement will be pivotal for determining market trends. He expressed a cautious optimism for the following year.

“However, with the Fed chairman’s replacement scheduled for May next year, we’re likely to see additional interest rate cuts in 2026, which should be beneficial for risk assets, crypto included.”

Nick Ruck, the director at LVRG Research, shared a similar view, suggesting that in addition to the Fed meeting, anticipated job and inflation data releases could lead to reinvigorated liquidity inflows and trigger a more comprehensive market recovery, provided they align with expectations for continued monetary easing.