Bitcoin saw a sharp rise on Tuesday, reaching its strongest level in three weeks and prompting what Santiment described as a “much-needed rebound” that has pushed traders to “FOMO back in and expect higher prices.”

According to TradingView, the asset briefly touched the $94,625 level, its highest point since Nov. 25, before pulling back toward $92,400. Santiment noted that this move triggered a wave of social media commentary filled with terms like “higher” and “above,” although heightened optimism does not always translate into further gains. The firm added that markets often “move opposite to the small traders’ behavior,” which appeared to play out shortly after Bitcoin hit its monthly high.

Fed decision looms over market momentum

The next major catalyst may arrive with Wednesday’s Federal Reserve meeting, which could inject volatility into the market. Futures markets tracked by CME Group currently reflect an 88.6% likelihood of a 0.25% rate cut. Jeff Mei, chief operations officer at BTSE, said Bitcoin’s recent strength may be tied to expectations of monetary easing, but “it’s difficult to say what will happen after tomorrow’s Fed meeting.” He warned that any reluctance from the Fed to commit to ongoing cuts may weigh on crypto.

CME’s projections show only a 21.6% chance of an additional cut in January, and Mei noted that hesitation to stimulate the economy has, in the past, been followed by sharp declines. Analyst “Sykodelic” echoed this uncertainty, saying that any pre-FOMC price action will be more on the volatile side.

Sources:

https://cointelegraph.com/news/bitcoin-much-needed-rebound-94k-ahead-fed-meeting

https://www.tradingview.com/symbols/BTCUSD/?exchange=COINBASE

https://x.com/santimentfeed/status/1998538306166890620

https://x.com/NoLimitGains/status/1998433922737123577

https://x.com/Sykodelic_/status/1998489358069055876