Bitcoin prices climbed to a three-week high on Tuesday in a “much-needed recovery” that prompted traders to “FOMO back in and anticipate higher prices,” according to blockchain analytics firm Santiment.
Bitcoin (BTC) prices surged to $94,625 on Coinbase in late trading on Tuesday, as reported by TradingView, marking its highest point since Nov. 25.
Santiment noted this has triggered a flood of social media posts requesting “higher” and “above” across various platforms.
Nevertheless, it has begun to pull back from that level, declining to $92,400 at the time of writing, leaving analysts questioning its future direction.
“Markets tend to move contrary to the behavior of small traders,” said Santiment, noting this phenomenon in the hours following the monthly peak.
Bitcoin volatility ahead of the Fed decision
The recent spike may be challenged following the Fed meeting on Wednesday, some analysts caution.
The Federal Reserve is set to announce its interest rate decision on Wednesday, with an 88.6% probability of a 0.25% rate cut, per CME Group futures markets.
“Bitcoin is likely rising on rate cut expectations, though it remains hard to predict what will unfold after tomorrow’s Fed meeting,” Jeff Mei, COO at BTSE exchange, told Cointelegraph.
Related: BTC poised for December recovery on ‘macro tailwinds,’ Fed rate cut: Coinbase
He warned that any reluctance regarding future rate cuts could be bearish for Bitcoin and the broader crypto markets. The CME futures marketplace indicates a 21.6% chance of another quarter-point rate cut in January.
“The risk lies in the Fed’s outlook potentially showing hesitance to cut rates or stimulate the economy further due to concerns over inflationary pressures. This was seen the last time the Fed cut rates, leading to a subsequent price drop.”
“Any price movements leading up to the FOMC are challenging to interpret because tomorrow [Wednesday] is likely to be highly volatile,” commented analyst “Sykodelic.”
A Bitcoin investor suggests the recent price move was suspicious
Long-term Bitcoin investor “NoLimit” stated to their 53,000 X followers that the price increase was “pure manipulation.” The abrupt spike to $94,000 “doesn’t appear organic at all,” they added.
“People are celebrating, but if you take a step back for even 10 seconds, the move bears all the hallmarks of a classic engineered pump.”
The analyst highlighted that thin order books allow for easier price manipulation, massive market buys occurred within minutes, followed by no sustained momentum—just immediate stalling.
“This is precisely how large players induce FOMO to offload at more favorable prices.”
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