Bitcoin's Longest Decline Since Mid-2024: Mixed Signals Emerge as Fed Policy Shifts

Bitcoin has just wrapped up its worst four-week performance in over six months, though recent price action suggests the selling pressure may finally be easing. Trading currently around $87,700 with a modest 0.08% daily gain, the asset remains underwater for the quarter, down nearly a quarter of its value. For context, that translates to roughly 110,000 JPY to USD in volatility—quite the swoon compared to earlier this year. By most measures, this looks like capitulation territory.

When Pessimism Becomes Opportunity

Here’s where it gets interesting: despite the gloomy headlines, on-chain metrics are flashing a different story. The aggregate spot bid-ask delta at 10-depth has jumped to its second-highest reading all year, suggesting institutional and sophisticated buyers are quietly absorbing weakness. Research analysts point to a similar surge during the March-April downturn, which later catalyzed a 64% recovery. “The data is saying buyers are present,” notes market watchers, even if headlines remain doom-focused.

Bitcoin’s 7-day performance shows a faint green candle at +2.19%, signaling that the bounce from the November 21 low of $82,100 is holding ground. That’s a nearly 6% recovery in just over a month, hardly catastrophic.

Fed Pivot Could Be the Catalyst

The narrative is shifting in the market’s favor. Rate-cut odds for December have jumped to 70%—nearly double last week’s 40% probability. This dramatic repricing reflects the growing acceptance that inflation may cool enough to justify monetary ease. Even more significant: the Fed will end its quantitative tightening on December 1, marking a policy inflection point.

However, not everyone is convinced this translates to immediate upside. Options market data reveals significant put accumulation in the $80,000-$85,000 range, particularly for December contracts. This suggests traders are hedging against another leg lower, even as pessimism peaks.

The Bull Trap Question

Crypto researchers remain split. The most cautious voices warn that “walking into a bull trap” is possible despite positive signals. They cite persistent headwinds: digital asset treasuries underwater on NAV, ongoing ETF outflows for both Bitcoin and Ethereum products, and Fed hawkishness that could delay quantitative easing despite rate cuts.

Still, the base case from major analysts sees a path to $90,000 by year-end if the Fed doesn’t surprise hawkishly, potentially pushing toward $100,000 in early 2026.

What Matters Next

December 10’s Fed decision looms large. Combined with the December 1 taper conclusion, this week marks a pivotal moment for risk sentiment. Bitcoin’s four-week decline may be the worst since mid-2024, but the technical and on-chain setup suggests the floor is being tested, not broken.

The longest losing streak doesn’t always mark the trend’s end, but when conviction buyers show up and the Fed shifts posture, narrative reversals happen fast.