Last night, Bitcoin once fell below $86,500, with a daily drop of over 5%, catching long positions off guard.

Panic comes quickly and goes just as fast—latest news shows that the probability of the Federal Reserve cutting interest rates in December has surged to 87%, and Trump has suddenly announced "the next Federal Reserve chair has already been selected." With this combination of moves, some analysts are directly saying: $120,000 is not a dream.

Let's first talk about what is hidden behind the plummet. On the macro level, the inflation data is quite sticky, and rumors about tariffs are everywhere. Who dares to move risk assets? The situation for ETFs is even worse, with a net outflow of over $3.5 billion in November, and funds are voting with their feet. Furthermore, dozens of billions in leveraged long positions were forcibly liquidated, triggering a chain reaction of liquidations. Once the deleveraging spiral starts, it cannot be stopped. By the way, there’s also the issue with Yearn Finance—once the hacker made a move, the entire DeFi circle was shaken.

But the turning point may be hidden on the Federal Reserve's poker table. Analyst Rachael Lucas provided two scenarios: if interest rate cuts are realized as expected, it could rise 10%-15% within a week, heading straight for $95,000 to $100,000; if Powell sends some dovish signals, $110,000 or even $120,000 wouldn't be an exaggeration.

Now the key is to look at a few positions: $87,000 is the lifeline; if it can't be held, it may fall all the way to $80,400 or even $75,000. There are two catalysts—interest rate cuts being finalized + the new chairman making an appearance. Once liquidity expectations are ignited, market sentiment can flip instantly.

Of course, we also have to guard against the tactic of "good news leads to bad news". If Powell suddenly hints at pausing the easing, it’s not impossible to see a pullback to 80,000 dollars. What the market has always wanted is not just promises, but real liquidity.

Interest rate cuts + leadership change, these two cards are already on the table. Are your chips ready?