BTC returns to $93,000; what happened after the $83,000 one-day rally?

The cryptocurrency market rebounded rapidly last night, with Bitcoin returning to $93,000, briefly touching $93,660, erasing the losses from December 1st and rising over 7% in 24 hours. Ethereum briefly broke through $3,000, touching $3,070, rising over 10% in 24 hours. Data shows that $435 million in positions were liquidated across the network in the past 24 hours, with $67.9729 million in long positions and $367 million in short positions, primarily short positions. Bitcoin had just fallen to around $83,000 on December 1st, and within just 24 hours it rebounded rapidly, recovering all its losses. What happened to cause such significant volatility in the cryptocurrency market in such a short period? Have the various positive factors expected in December begun to influence the cryptocurrency trend, and can the market regain confidence during this rebound? I. Crypto Market Experiences Mixed Fortunes in One Day, Quickly Recovering Losses The crypto market began a rapid rebound last night, with Bitcoin returning to $93,000, briefly touching $93,660, erasing the losses from December 1st, and showing a 24-hour increase of over 7%. Ethereum followed suit, briefly breaking through $3,000, reaching $3,070, recovering to pre-December 1st levels, with a 24-hour increase of over 10%. Coinglass data shows that in the past 24 hours, $435 million in positions were liquidated across the network, with $67.9729 million in long positions and $367 million in short positions, primarily short positions. Of these, $215 million was liquidated in BTC and $89.9778 million in ETH. Over 115,000 people were liquidated across the network, with the largest single liquidation occurring on Bybit-BTCUSD, worth $10 million. Just a day ago, the crypto market experienced a sharp drop, with Bitcoin falling to the $83,000 level, quickly erasing previous losses. It's foreseeable that major positive factors anticipated in December, such as rising expectations of a Federal Reserve rate cut, a potential dovish successor to the chairmanship, and the end of quantitative tightening, have begun to influence the market, supporting a rapid rebound in cryptocurrencies and other risk assets. II. Trump Strongly Hints at "Dovish" Hassett to Take Over as Fed Chair Recently, the possibility of Kevin Hassett, Director of the White House National Economic Council, taking over the Federal Reserve has been steadily increasing. The Wall Street Journal reported that sources revealed that although the selection process for Fed Chair is still ongoing, Trump has almost locked in Hassett. Hassett is clearly leading among the final five candidates due to his strong loyalty to Trump and market approval. Trump stated at a cabinet meeting on Tuesday that he will announce his choice to succeed Powell as Fed Chair "early next year." Trump also mentioned at the meeting that Treasury Secretary Bessett, who is leading the selection process, does not want to serve as Fed Chair. Furthermore, at a White House event late Tuesday, Trump said, "I guess a potential Fed chairman is here too. Can I say? Potential. He's a respected man, I can tell you that. Thank you, Kevin." This statement was interpreted by the market as Trump personally implying that Hassett is the leading candidate to succeed him as Fed chairman. Polymarket data shows that Hassett's probability of being elected Fed chairman has risen to 86%. Trump has consistently favored candidates who support low interest rates, and Hassett, along with other candidates, are both public advocates of low interest rates. Despite a lack of explicit public statements, Hassett is widely considered a supporter of cryptocurrency. In June of this year, he disclosed that he held at least $1 million worth of shares in Coinbase and received at least $50,001 in compensation for his role on the exchange's academic and regulatory advisory committee. This made his connection with the cryptocurrency industry exceptionally close, which is rare for a potential Federal Reserve Chairman. If the "dovish" candidate Hassett successfully takes over the Federal Reserve, this will have a significant impact on the Fed's future interest rate policy, and may indirectly stimulate the strength of the crypto market. III. The Fed's December rate cut continues to heat up; we'll see next week. With the emergence of potential "dovish" Federal Reserve Chairs like Kevin Hassett, Trump reiterated that the Fed Chairman should cut interest rates. He reiterated his criticism of Powell and stated that even JPMorgan Chase CEO Dimon said Powell should lower interest rates. CME's FedWatch tool shows that the probability of a 25 basis point rate cut by the Federal Reserve in December has risen to 89.2%, while the probability of keeping rates unchanged is 10.8%. The probability of a cumulative 25 basis point rate cut by the Fed by January is 66.6%, the probability of keeping rates unchanged is 7.7%, and the probability of a cumulative 50 basis point rate cut is 25.7%. Furthermore, Polymarket data shows that the probability of a 25 basis point rate cut by the Fed next week has risen to 93%, and the total trading volume in this prediction pool has exceeded $223 million. The expectation of a Federal Reserve rate cut in December continues to rise, with the market almost universally accepting a 25 basis point cut. The outcome will be revealed next week. Before the final decision is announced, this could further stimulate asset markets to strengthen. IV. The Federal Reserve Ends Quantitative Tightening, Injecting Liquidity into the Market The Federal Reserve officially ended its 3.5-year quantitative easing (QT) policy on December 1st, ceasing the process of reducing its balance sheet (referred to as "quantitative tightening"). Simultaneously, it injected $13.5 billion into the banking system through overnight repurchase operations. According to Federal Reserve economic data, this is the second largest liquidity injection since the COVID-19 pandemic, even surpassing the peak during the dot-com bubble. Since 2022, the Federal Reserve has withdrawn more than $2 trillion from the market, and its balance sheet has now decreased to approximately $6.55 trillion. Some analysts point out that ending "quantitative tightening" marks a turning point in Federal Reserve policy: the aggressive tightening policies implemented after the COVID-19 pandemic have come to an end. This move is intended to address liquidity risks and boost the US economy. As the Federal Reserve officially stopped shrinking its balance sheet this month, liquidity began to ease, potentially providing a new liquidity shock for Bitcoin and risk assets. V. Musk Says Debt Crisis is Good for Bitcoin, Boosting Market Sentiment In a recent interview, Musk stated that the US is rapidly heading towards a "debt crisis" that could trigger significant volatility in Bitcoin prices. Traders are preparing for potential major policy changes from the Federal Reserve in December, and against this backdrop, Musk predicts that in the future, "money as a concept will cease to exist," and energy will become the only "real money." Musk stated, "That's why I say Bitcoin is based on energy; after all, you can't create energy through legislation." He also mentioned that "the US is significantly increasing the money supply through a deficit of approximately $2 trillion." Elon Musk helped Trump return to the White House by warning of the ever-increasing US debt (currently exceeding $38 trillion), but their relationship deteriorated after Trump failed to control government spending. Although Musk's support for Bitcoin and cryptocurrencies has fallen from its peak during the COVID-19 pandemic, he continues to support Bitcoin and Dogecoin. After leaving the White House, Musk stated that his "American Party" would prefer Bitcoin to the US dollar, calling the dollar and other non-asset-backed currencies "hopeless." Musk's support for cryptocurrencies is long-standing, and his statements have consistently boosted the crypto market to some extent; this time is no exception. VI. Market Trend Analysis Have the aforementioned series of positive factors begun to influence the market trend of cryptocurrencies and other risky assets? Has panic subsided somewhat? Can investors regain confidence during the rebound? Let's take a look at the main market analysis. 1. Grayscale Research states that Bitcoin is poised to reach a new all-time high in 2026. In a report released Monday, Grayscale Capital points out that Bitcoin may not follow the so-called "four-year cycle"—the market generally believes that Bitcoin's price peaks every four years (in sync with its halving cycle) followed by a significant pullback. Grayscale notes that historically, while long-term investors can profit from holding assets during volatility, they often need to "endure sometimes challenging drawdowns." The firm adds that pullbacks of 25% or more are common during bull markets, and such pullbacks do not necessarily signal the start of a long-term downtrend. 2. Coinbase Institutional states that with the end of quantitative tightening (QT) and the Federal Reserve's re-entry into the bond market, the pressure to withdraw funds from the market may have subsided. This is generally positive for risk assets such as cryptocurrencies. In the current environment, the institution believes that high-probability opportunities are more likely to be breakout trades than knife-catching. 3. Glassnode and Fasanara Digital jointly released the "Q4 Digital Asset Report," stating that Bitcoin saw $732 billion in new funding in Q4, with one-year volatility nearly halved. Current market trading is more stable, the scale continues to expand, and institutional participation has significantly increased. 4. 4E Observation reported that Bitcoin quickly recovered all the losses caused by previous macroeconomic shocks. This strong rebound was mainly driven by two factors: First, the auction of Japanese 10-year government bonds became key to stabilizing global risk assets. Second, the market widely bet that Hassett has been "internally confirmed" as the next chairman of the Federal Reserve. Despite continued uncertainty surrounding the growth and inflation outlook for 2026, the dovish short-term policy stance has boosted US stocks and fueled a synchronized rebound in interest rate cut expectations, providing upward momentum for BTC. Rapid reversals in macroeconomic policy expectations and volatility in the Treasury market remain key variables dominating short-term market movements. The strength of BTC's recovery after this correction will depend on policy signals, the liquidity environment, and changes in the behavior of long-term holders. Maintaining a sense of rhythm and risk boundaries is recommended. 5. BitMine Chairman and CEO Tom Lee remains optimistic about cryptocurrencies and the stock market. In an interview with CNBC, he stated that the Federal Reserve will provide the biggest positive impetus in the coming weeks. Lee said, "I think the biggest positive factor coming in the coming weeks will be the Fed. The Fed is expected to cut rates in December, and the Fed has also ended quantitative tightening. This has been a significant tailwind for market liquidity." As liquidity in the system is no longer being withdrawn, the inflow of funds into risk assets may begin to accelerate. Lee is particularly confident in Bitcoin. He believes that historically, increased liquidity has often been associated with stronger performance of "risk-averse" assets. 6. Yi Lihua, founder of LiquidCapital (formerly LDCapital), posted on social media: Although BTC has returned to $93,000, BCH has hit a recent high, and WLFI has stabilized after a surge, ETH and the broader market are still lagging behind the stock market and the overall positive environment. With the confirmation of another crypto-friendly new chairman (Federal Reserve) after the SEC chairman, the 60-day bear market in crypto may be coming to an end. These 60 days were caused by the severe decline in liquidity across the industry due to 10/11, the four-year cycle resonance, the Japanese interest rate hike, and the government shutdown, but these negative factors have now been digested. With the dual benefits of interest rate cut expectations and crypto policies, he remains optimistic about the future market. Investing always requires not only wisdom but also patience.

7. AllianceDAO co-founder QwQiao stated that if L1 tokens have the potential to become a non-sovereign store of value, it indicates that their price is not yet severely overvalued and can also serve as an effective hedging tool against Bitcoin. He still believes that Bitcoin is undoubtedly the best non-sovereign currency and the most likely asset to replace gold.