(qlmbusinessnews.com . Sun 7th Dec, 2025) London, UK —
Bitcoin's December Recovery: Analyzing the Impact of Federal Reserve's Rate Decisions on Cryptocurrency
Coinbase Suggests December Rally for Bitcoin, Though Federal Reserve's Forward Guidance May Temper Expectations
The potential for a “Santa” rally for Bitcoin is being discussed, fueled by favourable macroeconomic conditions including the anticipation of the Federal Reserve's interest rate decision. Yet, investor confidence could be dampened by any stern warnings from Fed officials.
Coinbase Institutional suggests the cryptocurrency market could see a rebound this December, bolstered by improving liquidity and a more likely interest rate cut from the Federal Reserve.
In a report released on Friday, Coinbase highlighted, “Crypto could be set for a December revival as liquidity conditions ameliorate, the probability of a Fed rate cut rises to 92% (as of December 4th), and positive macroeconomic developments gather momentum.”
Coinbase had forecasted a period of downturn in the crypto markets before a turnaround in December, an analysis drawn from its customised global M2 money supply index which tracks the circulation and volume of fiat currencies.
However, the company also noted the prevailing sentiment of fear, resulting in both institutional and retail investors exercising caution and leading to a stagnation in market activity. This hesitancy is expected to persist until there is a recovery in the flow of investments into exchange-traded funds (ETFs), according to Coinbase.
Related developments include the steady Bitcoin price around $90,000 even as significant purchasing is seen in the Ethereum dip, underscoring investor activities in the digital currency markets.
Looking towards the early months of 2026, Bitcoin's trajectory could significantly depend on comments made by Jerome Powell, Chair of the Federal Reserve, observes Nic Puckrin, a notable crypto analyst. Puckrin told Cointelegraph, “Should the Fed opt for a rate cut on December 10th alongside concluding its quantitive tightening, the pathway for a Bitcoin Santa rally looks clear barring unforeseen geopolitical upheavals.”
Puckrin added that Powell's press conference remarks would be meticulously analysed for clues on the monetary policy direction for 2026, cautioning that any stringent rhetoric could dampen the rally's spirit.
In the backdrop of November's selling pressure on Bitcoin, attributed to Powell's previous strict comments, analysts predict a December turnaround. Among them is Chris Kim, co-founder and CEO of Axis, who is optimistic about a rebound, stressing the current macroeconomic environment as a crucial factor. Speaking with Cointelegraph, Kim noted, “With the market testing the $80,000 region and the 100-week average, alongside emerging positive signals like Vanguard permitting ETF trades, our outlook leans towards recovery.”
Further speculation involves Kevin Hassett, Director of the National Economic Council, potentially becoming the next Federal Reserve Chair in early 2026. Such an appointment is anticipated to result in a more accommodative policy stance, according to Kim, potentially influencing the digital assets domain.
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