NEW YORK / LONDON (IT BOLTWISE) – The mood among Bitcoin investors has noticeably brightened after the likelihood of a US Federal Reserve interest rate cut increased significantly in December. Many see this as a possible turning point for the recently weakening Bitcoin price, which has fallen by over 10% in the last seven days.
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Recent developments in the financial market have caught the attention of the Bitcoin community. The likelihood that the Federal Reserve will cut interest rates in December has almost doubled. This has caused optimism among Bitcoin investors, as a rate cut is traditionally seen as a positive for riskier assets such as cryptocurrencies. The Bitcoin price, which has recently been under pressure, could receive new impetus from such a measure.
On Friday, the odds of a rate cut at the December Federal Open Market Committee (FOMC) meeting rose to 69.40%, the CME FedWatch tool shows. Just the day before, this probability was only 39.10%. This development is being attributed in part to dovish comments from New York Fed President John Williams, who suggested that the Fed could cut interest rates in the near future without jeopardizing its inflation target.
In the crypto community, this prospect is seen as a potential catalyst for a turnaround in the Bitcoin price. Analysts such as Moritz and Jesse Eckel expressed positivity about the possibility that the Bitcoin market could find a bottom. Eckel emphasized that the transition from a tightening to an easing cycle of monetary policy could create an incredibly bullish situation for Bitcoin.
However, some experts, such as economist Mohamed El-Erian, warn against getting too carried away by the current comments. Even though a rate cut is traditionally considered positive for the crypto market, the general market sentiment remains tense. The Crypto Fear & Greed Index continues to show extreme fear among investors, reflecting the uncertainty in the industry.
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