Bitcoin prices rose to a three-week peak on Tuesday in a “much-needed recovery” that has prompted traders to “FOMO back in and anticipate higher prices,” according to blockchain analytics company Santiment.
Bitcoin (BTC) prices climbed to $94,625 on Coinbase during late trading on Tuesday, as reported by TradingView, marking its highest point since Nov. 25.
Santiment stated that this has triggered a surge of social media discussions calling for “higher” and “above” on various platforms.
However, it has already begun to pull back from that level, dropping to $92,400 at the time of writing, leaving analysts speculating about its next move.
“Markets tend to move contrary to the behavior of small traders,” Santiment noted, as this appears to be unfolding in the hours after the monthly high.
Bitcoin volatility ahead of the Federal Reserve decision
The recent rise could face challenges 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% chance of a 0.25% rate cut, according to CME Group futures markets.
“Bitcoin is likely rallying based on expectations of a rate cut; however, it’s currently difficult to predict what will happen after tomorrow’s Fed meeting,” Jeff Mei, chief operations officer at the BTSE exchange, told Cointelegraph.
Related:BTC positioned for a December recovery amid ‘macro tailwinds,’ Fed rate cut: Coinbase
He warned that any uncertainty regarding future rate cuts could have a negative impact on Bitcoin and the crypto markets. The CME futures prediction market gives a 21.6% chance of yet another quarter-point rate cut in January.
“The risk is that the Fed’s outlook may express hesitation to cut rates or further stimulate the economy for fear of triggering inflationary pressures. This occurred the last time the Fed cut rates, causing prices to drop thereafter.”
“Any price movements leading into FOMC are difficult to interpret because tomorrow [Wednesday] is likely to be very volatile,” agreed analyst “Sykodelic.”
A Bitcoin investor claims the recent price movement seems suspicious
Long-term Bitcoin investor “NoLimit” informed their 53,000 X followers that the price spike was “pure manipulation.” The sudden rise to $94,000 “doesn’t appear organic at all,” he added.
“While people are celebrating, if you take a moment to look closely, this move has all the signs of a classic engineered pump.”
The analyst noted that the thin order books make it inexpensive to drive prices up, with large market purchases clustered within a short timeframe, followed by a total lack of continuation—“just immediate stalling.”
“This is precisely how large players create FOMO so they can sell at better prices.”
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