Bitcoin breaks week-long range as Fed cut bets spark short squeeze

Bitcoin broke out of a week-long range as Fed rate cut bets and $150B in fresh crypto market cap fueled a short squeeze, with altcoins outperforming BTC.

Bitcoin (BTC) traded higher on Dec. 9 as the total cryptocurrency market capitalization increased by $150 billion in 24 hours, according to market data. The digital asset briefly reached elevated price levels before retreating during a session marked by institutional adoption announcements, Federal Reserve rate cut speculation, and forced liquidations of short positions.

Bitcoin changes in response to anticipated Fed decisions

PNC Financial Services Group, the eighth-largest U.S. commercial bank by assets, launched direct spot Bitcoin trading for eligible clients through its proprietary platform, the bank announced. The service operates on Coinbase’s Crypto-as-a-Service infrastructure, extending cryptocurrency access to clients who previously lacked on-platform exposure.

The announcement stated that the service integrates Bitcoin trading within the same interface PNC’s wealth-management and institutional clients use for equities and fixed income, eliminating the need for separate exchange accounts.

Financial markets are pricing in a Federal Reserve interest rate cut at this week’s meeting, reducing concerns over financial conditions across risk assets, according to market analysts. Rate cuts lower the opportunity cost of holding non-yielding assets such as Bitcoin and other cryptocurrencies relative to cash and short-duration bonds.

Major alternative cryptocurrencies also posted gains during the session as capital flowed into digital assets.

Forced liquidations of leveraged positions accelerated the price movement, according to data from CoinGlass. Bitcoin broke through a price range that had contained the asset for the prior week, triggering stop-losses and forced liquidations of short positions. The majority of liquidations in the past 24 hours consisted of short positions, CoinGlass data showed.

The cascade began as Bitcoin’s price exceeded levels where open interest data indicated concentrated bearish positions. As those positions unwound, market makers purchased hedges, pushing prices higher and triggering additional liquidations. The mechanical buying lifted Bitcoin to higher levels before profit-taking by traders capped the advance.

Alternative cryptocurrencies outperformed Bitcoin on a percentage basis during the session, suggesting increased appetite for speculative digital assets, market observers noted.