Bitcoin (BTC) has been holding steady above $100,000 recently, but with the Federal Reserve set to make a crucial decision on interest rates, the future of Bitcoin’s price is uncertain. As traders and analysts prepare for the Fed’s upcoming rate meeting on December 18, many are wondering if a rate cut could send Bitcoin soaring toward $103K—or cause it to plunge. Here’s what you need to know about how the Fed’s decision might affect Bitcoin’s price.

Bitcoin’s Current State: Above $100K

For the past few days, Bitcoin has remained comfortably above $100K, a price point that has many investors and traders excited. However, the market’s next big move may depend heavily on the Federal Reserve’s decision on interest rates.

After recent reports on U.S. inflation and labor data, many experts believe there’s a 96% chance that the Fed will reduce interest rates by 0.25%. This could be the second rate cut in a row, and such a move would have far-reaching effects on the broader financial markets, including cryptocurrencies like Bitcoin.

What Could Happen to Bitcoin if the Fed Cuts Rates?

Bitcoin’s price is heavily influenced by broader economic trends, and the Fed’s actions are a key factor. Historically, when the Fed cuts rates, it often leads to more investment in riskier assets like Bitcoin. Lower interest rates make traditional investments like bonds and savings accounts less attractive, which can push investors toward cryptocurrencies in search of higher returns.

However, there’s a potential downside. If the Fed’s rate cut drives a short-term surge in Bitcoin’s price, it could quickly lead to a “bull trap”—a scenario where the price rises briefly, attracting more buyers, only to reverse course and fall sharply. This type of market behavior has happened before, and many analysts are closely watching the $103K price level as a key indicator.

$103K: A Crucial Price Point for Bitcoin

BTC trader Cryp Nuevo has been tracking Bitcoin’s price movements closely and believes the cryptocurrency could soon target the $103K to $104K range. This is an important price level because many traders have placed “short” positions there—bets that Bitcoin’s price will drop. If Bitcoin’s price hits these levels, it could trigger a wave of short position liquidations, causing a sharp price move higher.

Cryp Nuevo recently shared his thoughts on social media, saying, “There’s a lot of short liquidations at $103K. It might be time to target them.” This suggests that Bitcoin could surge toward $103K as these positions get wiped out, but it’s also possible that the price will quickly fall back afterward, creating a temporary price spike before a downturn.

Bitcoin’s Likely Price Movement

The technical chart for Bitcoin shows that the cryptocurrency has been moving within a rising channel. Right now, Bitcoin is near the middle of this channel, which means it could push higher toward the $103K-$104K range. However, this upward move may not last long. Bitcoin’s price could then pull back to lower levels, around $97K, which is seen as a strong support area.

Bitcoin’s behavior could depend largely on how traders react to the Fed’s decision. If the rate cut drives buying, Bitcoin could briefly test the $103K-$104K levels. But after hitting these targets, the price could retreat toward the lower end of the channel.

Is a Bull Trap Likely?

A bull trap occurs when the price of an asset, like Bitcoin, rises quickly, only to fall just as fast, leaving investors who bought in during the rise with losses. Bitcoin’s recent market indicators suggest that a bull trap could be in play. The “global longs” indicator, which tracks the number of traders betting on Bitcoin’s rise, is currently showing a decline. When this indicator drops, it often signals that a price pullback is near.

As Bitcoin nears the $103K level, traders who were betting on a price increase could get caught in a trap if the price reverses quickly. The next few days will be crucial in determining whether Bitcoin can maintain its upward momentum or if it will face a sharp pullback.

What Does This Mean for Bitcoin’s Future?

Bitcoin’s future is uncertain, and much depends on the Fed’s actions. A rate cut could give Bitcoin a short-term boost, but there’s also a risk of a quick price reversal, especially if the $103K price level triggers a liquidity sweep. Traders will need to stay vigilant, watching for signs of a potential bull trap as the market reacts to the Fed’s decision.

In the short term, Bitcoin could test the $103K-$104K levels before retreating to the $97K support zone. However, if Bitcoin manages to break through these levels and hold its ground, it could signal a new wave of bullish momentum. For now, all eyes are on the Fed’s rate decision and how it will influence Bitcoin’s next move.