Bitcoin enthusiasts expressed newfound optimism as analysts suggest that the probability of a Federal Reserve interest rate cut in December has surged. This development may serve as a pivotal moment for Bitcoin to stabilize its price following a downward trajectory.
On social media, Bitcoin holders are increasingly positive, believing that these indicators might help the cryptocurrency find its temporary bottom.
“Let’s see if that’s enough to find a bottom here for now,” crypto analyst Moritz stated on X, noting that Bitcoin’s current value stands at $85,071, reflecting a 10.11% decline over the past week, according to CoinMarketCap.
The chances of a rate cut by the Federal Open Market Committee (FOMC) meeting in December have nearly doubled to 69.40%, as reported by the CME FedWatch Tool. This is a significant increase from Thursday’s assessment, which was at 39.10%.
The odds of a Fed rate cut increased significantly on Friday. Source: CME Group
The surge in expectations has been attributed in part to New York Fed President John Williams’ comments, expressing that the Fed could lower rates ‘in the near term’ without jeopardizing its inflation goals. Bloomberg’s Joe Weisenthal explained that these remarks have substantially driven the increased likelihood.
Market Perspective
Economist Mohamed El-Erian cautioned against excessive optimism, advising traders not to react impulsively. However, broader sentiments within the crypto community seem overwhelmingly positive. As noted by Mister Crypto on X, “Usually this would be bullish.”
Historically, rate cuts from the Fed tend to favor riskier assets, including Bitcoin, as interest in traditional investments wanes.
Source: Ted
Analysts like Jesse Eckel have pointed out the favorable conditions and remarked, “If you zoom out, the setup is unfathomably bullish.”
Even with the current sentiment reflecting weakness, particularly as the Crypto Fear & Greed Index measured an ‘Extreme Fear’ score of 14, the underlying outlook appears more promising as events unfold.
