Bitcoin was steady around $86,650 early Thursday after a sharp bout of volatility that rattled traders the previous day, highlighting how closely crypto markets remain tied to broader economic signals and expectations around U.S. interest rates.
Data shows bitcoin edging up about 0.06% over the past 24 hours, trading near $86,670 as of 12:15 a.m. ET. The calm followed a turbulent Wednesday, when the world’s largest cryptocurrency briefly climbed to roughly $90,000 in early trading before sliding back below $86,000 within hours.
Market participants say the swings reflect thin liquidity and persistent macroeconomic uncertainty, conditions that have weighed on risk assets in recent weeks.
Nick Ruck, director of LVRG Research, said the latest price action is less about crypto-specific news and more about the global backdrop. He pointed to risk-off sentiment in traditional markets, softer inflows into bitcoin exchange-traded funds, reduced leverage in derivatives, and a stronger correlation with equities as key drivers. Uncertainty around monetary policy has added to the pressure, he noted.
Others see bitcoin’s current range as a pause after a strong run rather than a seasonal pattern. Vincent Liu, chief investment officer at Kronos Research, described the move as a “re-pricing” phase, with investors waiting for a clear catalyst.
“Flows have cooled, leverage has reset, and the market is waiting for fresh liquidity,” Liu said, adding that choppy, sideways trading is likely to remain the base case in the near term.
Liu also downplayed fears of a deeper downturn, saying the market is not entering a “crypto winter” yet. Bitcoin has been holding above what he described as its “True Market Mean” around $81,000. A sustained drop below that level, he said, could increase downside risks, but for now the structure remains intact.
Beyond crypto-specific factors, attention is firmly on the U.S. Federal Reserve and the path of interest rates. After cutting rates at the past three Federal Open Market Committee meetings, Fed Chair Jerome Powell recently signaled that another cut in January may be unlikely.
Market-based expectations reflect that caution. The CME Group’s FedWatch Tool shows a roughly 73% probability that rates will remain unchanged next month, while Polymarket pricing implies a similar outlook, with rates expected to stay in the 3.50% to 3.75% range.
Still, speculation is growing about a potential shift in policy later next year, tied to leadership changes at the Fed. President Donald Trump said Wednesday that he plans to appoint a new Fed chair who strongly favors lower interest rates once Powell steps down in May.
Speaking at an event, Trump said the next chair would support cutting rates “by a lot,” reiterating his long-standing view that U.S. borrowing costs should fall to around 1% or lower. He suggested an announcement could come early in the new year.
According to Reuters, Trump has recently interviewed Fed Governor Christopher Waller, who has been seen as more open to lower rates and supportive of crypto-related innovation. Former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett are also widely viewed as leading contenders among a short list of candidates.
For now, bitcoin appears caught between technical levels and macro headlines, with traders watching both liquidity conditions and signals from Washington. As markets head toward year-end, stability around current prices may offer a pause, but expectations for 2026 suggest that uncertainty is far from over.
