Bitcoin Could Plunge to $50K—Is Your Portfolio Ready for the Shocking Fed Decision?

Bitcoin, the world’s largest cryptocurrency, is facing significant price volatility, with experts warning that it could plummet as low as $50,000. This unsettling forecast comes from Markus Levin, co-founder of the blockchain company XYO. According to Levin, the cryptocurrency is currently at risk of crashing from its existing price of approximately $89,700 if it fails to maintain a steady position above $100,000.

The upcoming meeting of the Federal Reserve on December 10 is pivotal for the financial landscape. Investors are awaiting the central bank's decision on whether to cut interest rates—a move that could inject vital liquidity into markets. Historically, such reductions tend to favor riskier assets, including cryptocurrencies. However, Levin cautions that even a rate cut may not suffice to stave off further declines in Bitcoin's price.

“Fear and greed indices have moved into extreme fear. All of this supports deeper corrective action,”

Levin told DL News. This sentiment reflects a broader anxiety among traders who are navigating a tumultuous environment influenced by factors such as the ongoing trade tensions initiated by former President Donald Trump, geopolitical conflicts, and other macroeconomic challenges.

Currently, Bitcoin prices are struggling to stay above the psychologically significant threshold of $100,000. Levin identifies potential price points, or “magnets,” at $82,000 and $78,000, where demand could potentially counteract downward momentum. However, he warns that if these levels are breached without adequate demand for recovery, a drop into the low $70,000s could occur. He emphasizes that a brief dip below $50,000 cannot be ruled out, particularly in a market with thin liquidity.

Data from basedmoney reveals that Bitcoin options traders do not seem as pessimistic in the short term, at least through the end of 2026. The most significant put position—bets that the price will decline—for options expiring on December 26 is set at $85,000. This suggests that while some investors are hedging against further declines, others are not overly bearish.

Georgii Verbitskii, founder of the crypto investment platform TYMIO, echoes Levin’s sentiments, stating that Bitcoin is in a precarious position. He remarks, “Structurally, the uptrend is still broken. Until Bitcoin establishes a firm hold above $100,000, it’s too early to rule out deeper pullbacks.” Verbitskii further notes that Bitcoin’s ability to maintain stability above the $100,000 mark is crucial for preventing further declines.

Other factors contributing to Bitcoin's downward pressure include rising global inflation rates and outflows from Bitcoin exchange-traded funds, which have historically been a vital source of investment in cryptocurrencies. Mike McGlone, a strategist at Bloomberg Intelligence, has also weighed in on the situation, forecasting that Bitcoin might trade below $84,000 by the end of 2025.

The cryptocurrency market remains in a state of flux, with traders and analysts closely monitoring external economic signals. As the Federal Reserve prepares for its crucial decision, the future trajectory of Bitcoin—and the broader crypto market—hangs in the balance. For investors, this is a critical moment to evaluate exposure to Bitcoin as the potential for sharp price fluctuations looms large.