Surge in Rate-Cut Anticipations: Will Bitcoin Finally Break Through $91K?
Bitcoin remains stagnant at $91,000, impacted by muted ETF investments and cautious derivatives amidst a stock market rally propelled by increasing expectations for rate cuts.
Bitcoin’s price is hovering around $91,000, largely influenced by weak ETF inflows and cautious sentiment in derivatives, as equities and gold appreciate due to rising expectations of interest rate reductions.
Key Highlights:
- The demand for BTC put options and stagnant ETF inflows has been limiting momentum, despite easing macroeconomic conditions.
- Recent advancements in AI technologies have alleviated some market stress, yet Bitcoin’s durability hinges on maintaining the $90K mark as investors anticipate liquidity support given the slack job market data.
Fed target rate expectations for Dec. 10.
Fed target rate expectations for Dec. 10. Source: CME Group FedWatch Tool
According to bond futures data from CME Group, traders are projecting an 87% likelihood of an interest rate cut on December 10, up from 71% the previous week.
The weakening of the US job market has led investors to look for a looser monetary policy, as indicated by the US Labor Department, which reported that continuing claims rose to 1.96 million for the week ending November 15.
BTC derivatives sentiment remains largely unchanged despite the recent price weakness, although demand for bullish positions is still quite cautionary. Bitcoin’s monthly futures are at a 4% premium over spot markets, constant from last week. Under normal conditions, this premium typically falls between 5% and 10%.
Market Dynamics
- Examination of BTC options markets can help assess whether prominent investors and market makers are anticipating further declines. Heightened demand for put options usually characterizes bearish trends.
- On Thursday and Friday, volumes in put options surpassed those in call options, indicating increased uncertainty.
- A neutral market condition would require put-to-call premium volumes to stabilize at 1.3x or less.
- Despite this caution, it’s noteworthy that no companies using Bitcoin as a primary reserve have added to their holdings recently.
- Additionally, SpaceX moved 1,163 BTC, igniting speculation about a possible sale without any official confirmation.
🚨 NEW: SpaceX moves 1,163 $BTC worth about $102M to two new addresses, per Nansen data. — Cointelegraph (@Cointelegraph)
In a related vein, Donald Trump reiterated his intent to significantly reduce income taxes during the US holiday, citing anticipated revenue from import tariffs, which has encouraged a risk-taking attitude among investors, favoring scarce assets.
Bitcoin appears to be charting its path to $100,000, seemingly less intertwined with broader macroeconomic currents as it diverges from its previous correlations with technology stocks. The longer Bitcoin remains above the $90,000 threshold, the more confidence market bullishness seems to grow, aided by ETF inflows, diminished risk aversion in derivatives, and potential liquidity inputs from central banks.
