Bitcoin broke out of a week-long range and altcoins outperformed BTC as speculation of a Fed rate cut and a new $150 billion crypto market cap fueled a short squeeze.
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- Bitcoin briefly rallied as the cryptocurrency market capitalization soared by about $150 billion in 24 hours as risk appetite increased.
- Traders have priced in the Federal Reserve's interest rate cuts at this week's FOMC meeting, lowering the opportunity cost of holding non-yielding assets like BTC and altcoins.
- Data from CoinGlass shows that when Bitcoin breaks out of a tight range, concentrated short positions are forced to be liquidated, leading to altcoins outperforming on a percentage basis.
Bitcoin (BTC) rose in value on December 9 as the cryptocurrency market capitalization increased by $150 billion in 24 hours, according to market data. The digital asset briefly reached elevated price levels, but fell during a session marked by institutional announcements, expectations of a Federal Reserve rate cut, and forced liquidations of short positions.
Bitcoin changes depending on expected Fed decision
PNC Financial Services Group, the eighth largest U.S. commercial bank by assets, has launched direct spot trading of Bitcoin for eligible customers through its proprietary platform, the bank announced. The service runs on Coinbase's Crypto-as-a-Service infrastructure and extends access to cryptocurrencies to clients who have traditionally lacked exposure on the platform.
According to the announcement, the service will integrate Bitcoin trading within the same interface that PNC's wealth management and institutional clients use for stocks and bonds, eliminating the need for separate exchange accounts.
Financial markets are pricing in a rate cut by the U.S. Federal Reserve at this week's meeting, easing concerns about the overall financial health of risk assets, market analysts said. Lower interest rates lower the opportunity cost of holding non-yielding assets like Bitcoin and other cryptocurrencies compared to cash or short-term bonds.
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Major alternative cryptocurrencies also recorded gains during the session as capital flowed into digital assets.
According to data from CoinGlass, forced liquidations of leveraged positions accelerated price fluctuations. Bitcoin broke through the price range that had held the asset back the previous week, triggering stop losses and forced liquidations of short positions. According to CoinGlass data, the majority of liquidations in the past 24 hours consisted of short positions.
This cascade began when Bitcoin price crossed a level where open interest data indicated a concentrated bearish position. As these positions were unwound, market makers bought hedges, pushing prices up and causing additional liquidations. Mechanical buying pushed Bitcoin to higher levels, but the gains were limited by traders taking profits.
Market participants noted that alternative cryptocurrencies outperformed Bitcoin on a percentage basis during the session, suggesting a growing appetite for speculative digital assets.
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