Bitcoin Hits $87K as Fed Rate Cut Odds Surge Before December FOMC
Bitcoin gave a brief pop after Fed Chair Jerome Powell took the stage at Stanford University to pay tribute to the late economist George...
Quick overview
- Bitcoin experienced a brief surge after Fed Chair Jerome Powell refrained from discussing the economy or monetary policy during a tribute to economist George Shultz.
- The latest ISM Manufacturing PMI data indicated a decline, fueling speculation for a 25-basis-point rate cut at the upcoming FOMC meeting, with an 87% probability according to CME's FedWatch tool.
- Bitcoin rose over 2% in the last 24 hours, closing at $86,970, driven by a 'buy the dip' sentiment despite mixed signals from the derivatives market.
- Market experts remain cautiously optimistic about the uptrend continuing, while uncertainty around the Fed's next moves adds to the volatility.
Bitcoin gave a brief pop after Fed Chair Jerome Powell took the stage at Stanford University to pay tribute to the late economist George Shultz, with traders breathing a sigh of relief that he chose not to delve into the current state of the economy or monetary policy.
Powell actually came right out and said it, “Just to be clear, I won’t be talking about the current state of the economy or monetary policy.”
You can bet nobody was expecting him to break his silence either, given he hasn’t spoken publicly about policy since his October press conference, where he sent a clear message – a December rate cut was anything but a certainty. The FOMC’s blackout period ahead of the Federal Reserve’s meeting on Dec 10th. Also of interest is the fact that the Fed just wrapped up its quantitative tightening program, so any policy statement he might have made could have caused a ruckus in the markets.
US Manufacturing Data Fuels Rate Cut Speculation
Everyone’s eyes are on the latest US economic metrics as they try to gauge what might happen next. Yesterday, the ISM Manufacturing PMI numbers came in – and they didn’t look good. Here are the key takeaways:
- November ISM Manufacturing PMI: 48.2 (well short of the forecasted 48.6)
- It’s the lowest reading in 4 months
- Orders are down, and prices are up, all thanks to those pesky tariffs
It all adds up to expectations of a 25-basis-point rate cut at next week’s FOMC meeting – and the CME’s FedWatch tool is currently putting the odds at 87% for just that.
Market experts are feeling cautiously optimistic, but in a ‘grind it out’ kind of way, according to Joe Saluzzi, the head of Equity Market Structure Research. “I see no reason why the uptrend won’t continue – at least not anytime soon.” And I suppose that’s not entirely different from saying “keep on truckin”.
The latest news from Washington, with White House Advisor Kevin Hassett looking to take over for Powell, is also contributing to expectations of even more monetary easing in the months to come.
Bitcoin Climbs Amid Buy-the-Dip Momentum
Bitcoin then went up by over 2% in the last 24 hrs, closing at $86,970 after the whole Powell silence thing. Trading volume has remained high due to that ‘buy the dip’ sentiment that’s been floating around. Here are the key metrics you need to know about:
- High/lows in the past 24 hours: $87,325 / $83,862
- Total open interest in BTC futures: $57.70 billion (up 0.25%)
- CME BTC futures: +0.63%
- Binance BTC futures: -0.72%
- Bybit BTC futures: -3.57%
The derivatives market is giving a fairly mixed signal, which suggests that investors are feeling pretty cautious – which is a good thing, given the uncertainty of what the Fed is going to do next week. It’s a gamble between a rate cut and more volatility – and for those with a taste for risk, Bitcoin is a good focal point this week.
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