Why did Bitcoin pump today? Kalshi predicts a 60% chance of breaking 100,000 by the end of the year.

After the price of Bitcoin rebounded 13% from a low of $80,000, it soared above $90,000. Kalshi traders believe there is a 60% chance that the price of Bitcoin will reach $100,000 by the end of the year. Following Treasury Secretary Basent's statement that President Trump is “very likely” to announce the Federal Reserve chairman candidate before Christmas, the stock market's upward momentum strengthened, with the market anticipating an 85% chance of a rate cut in December, expecting the successor to adopt a more dovish policy.

Speculations on the Chairman of The Federal Reserve (FED) Drive Market Sentiment

The primary reason for the rise in Bitcoin today is the change in market expectations regarding the selection of the Federal Reserve (FED) chair. Treasury Secretary Benson's remarks have injected confidence into the market, as he stated that President Trump “is very likely” to announce the Federal Reserve (FED) chair selection before Christmas. This timeline is earlier than what the market had originally anticipated, indicating that the government is accelerating the adjustment of financial policies.

The current chairman of the Federal Reserve (FED), Powell, will finish his term in May. During his tenure, Powell adopted a relatively cautious monetary policy, particularly maintaining high interest rates for an extended period under inflationary pressure. The market generally expects that Trump may appoint a more dovish successor, which would mean faster or larger cuts in interest rates. This expectation has directly driven up the prices of risk assets, as a low interest rate environment typically favors high-risk assets such as stocks and cryptocurrencies.

According to Besant, there are currently 5 strong candidates entering the second round of interviews, and the progress is very smooth. Although the list of candidates has not been made public, the market has already begun to price in the possibility of this policy shift. Federal Reserve officials have expressed a willingness to support interest rate cuts, and investors are closely monitoring the upcoming unemployment claims to look for clues on the timing of rate cuts. The market expects an 85% chance of a rate cut in December, and this high probability expectation is the core driver of why Bitcoin has risen today.

The impact of interest rate cut expectations on Bitcoin is multifaceted. First, low interest rates reduce the opportunity cost of holding cash and bonds, making investors more willing to allocate to high-risk assets. Second, interest rate cuts are usually accompanied by a depreciation of the dollar, and Bitcoin, as “digital gold,” often benefits when the dollar weakens. Third, the liquidity released by interest rate cuts will partially flow into the cryptocurrency market, providing support for prices.

Kalshi traders bet 60% that it will break 100,000 by the end of the year

Kalshi traders believe that the probability of Bitcoin reaching $100,000 by the end of the year is 60%. Kalshi is a prediction market platform where users can bet on the outcomes of future events. These markets often aggregate dispersed information to form more accurate probability forecasts. A 60% probability means that Kalshi traders consider it a more likely baseline scenario for Bitcoin to break $100,000 by the end of the year, rather than an extremely optimistic expectation.

This 60% probability forecast is based on a comprehensive assessment of multiple factors. First, Bitcoin has rebounded 13% from a low of $80,000, indicating that the market has moved past the most pessimistic phase and buying pressure is recovering. Second, with only about a month left until the end of the year, it only requires about an 11% increase from the current $90,000 to $100,000, which is not impossible in the Bitcoin market. Third, the anticipation of the upcoming announcement of the Federal Reserve chairperson provides a clear catalyst for the market.

However, a 60% probability also means there is still a 40% chance that it won't reach $100,000. This probability distribution reflects the market's cautious attitude towards macroeconomic headwinds. As credit default swap spreads widen, the credit risk of artificial intelligence-related tech companies also rises. Due to the synchronized fluctuations of Bitcoin with the Nasdaq index, concerns about the pace of artificial intelligence spending, especially regarding Nvidia's inventory, have also drawn attention.

The cryptocurrency ETFs continue to experience net outflows, with product trading prices below their indicative values. Strategy's Bitcoin fund is under scrutiny due to its stock appearing on the MSCI de-listing watchlist, raising concerns about overflow sell-offs. These negative factors constrained the extent to which Bitcoin rose today and explain why Kalshi traders' predictions are only at 60% instead of higher.

Institutional Buying and Liquidity Distribution Analysis

(Source: Coinglass)

According to analyst Tracer, the exchange purchased over 10 billion dollars worth of Bitcoin within 5 hours and is still continuing to accumulate. This large-scale institutional buying is the direct reason why Bitcoin is up today. The influx of 10 billion dollars in buying pressure in a short period of time is enough to drive the price up significantly, especially during periods of relatively low liquidity.

Currently, most of the liquidity is concentrated upwards, with a large concentration point appearing between $85,000 and $86,000. This means that if the price falls back to this range, it will encounter strong buying support. Returning to the range of $93,000 to $94,000, the price may approach $100,000. This distribution of liquidity provides a technical explanation for why Bitcoin has risen today.

Key Liquidity Area

(Source: CryptoQuant)

Support Area: $85,000-$86,000 (large buy orders concentrated), $88,000 (secondary support)

Resistance Area: 92,000-94,000 USD (direct resistance), 97,000-98,000 USD (liquidity-rich area after sell-off), 106,000-107,000 USD (major resistance area)

The daily chart shows that the price of Bitcoin is $90,484, establishing support above $90,000 after breaking the resistance level of $88,000. Direct resistance appears between $92,000 and $94,000, followed by the range of $98,000 to $101,972, and the major area of $106,000 to $107,000. The area between $97,000 and $98,000 has ample liquidity after continued sell-offs, resulting in lower price peaks.

In addition, the 90-day spot trading price difference has turned neutral, indicating that the selling pressure has eased. The dominance of buying could trigger a sustained upward trend. This technical improvement is an important support factor for why Bitcoin has risen today.

Warning of Renowned Analyst's Price Target Downgrade

Just today, Tom Lee also lowered his previous forecast of a target price of 250,000 dollars to above 100,000 dollars, stating that Bitcoin may “perhaps” retest the historical high of 125,100 dollars set in October. Lee explained that this lukewarm view stems from the crash on October 10, when an automatic liquidation was triggered due to a system failure, resulting in nearly 2 million accounts being cleared.

Tom Lee is a well-known Bitcoin bull on Wall Street, and he has significantly reduced his target price from $250,000 to above $100,000, indicating that even the most optimistic analysts are starting to adopt a cautious stance regarding the short-term outlook. Although this adjustment in the target price may be interpreted as a negative signal, from another perspective, a target of $100,000 still implies about an 11% upside from the current price, which aligns with the 60% probability forecast from Kalshi traders.

However, Lee pointed out that the demand for gold supported by cryptocurrency-backed stablecoins is continuously growing, which helps establish a higher future price floor. The issuer of USDT, Tether, has become the largest private holder of gold in the world, surpassing several central banks. This trend of diversifying stablecoin reserves into gold provides a more solid value support for the entire cryptocurrency market.

Key technical hurdles before the end of the year

(Source: Trading View)

Looking ahead, if we can successfully hold above $90,000, it will pave the way to advance towards the resistance levels of $92,000 to $94,000, and then potentially move towards the targets of $98,000 to $100,000. Lower time frame settings require a breakthrough of resistance levels to continue rising, with target price levels of $96,000 to $98,000.

If the support level is breached, it could trigger a retest of $88,000, and there may even be a larger pullback, dropping to $81,000 to $82,000. If it breaks the trend line and the 4-hour closing price is below $86,500, it may further decline to lower regions, forming a double bottom pattern.

It is worth noting that Thanksgiving has historically had an impact on market sentiment, averaging a loss of 0.8%. However, this year's pre-holiday rebound suggests that 2025 may break this trend. Glassnode warns that Bitcoin remains structurally weak after breaking below the 50-week moving average. This technical fragility is a risk factor that investors need to be aware of.