Rate Cut

Bitcoin fell 5% following the Federal Reserve’s rate cut, with the broader crypto market also in the red, even as the Fed announced balance sheet expansion.

The crypto market rallied sharply, driven by a short squeeze and signals from the White House that the Federal Reserve may cut interest rates, leading to massive liquidations of short positions.

Fed Chair Jerome Powell is set to deliver a key speech today, with markets anticipating a rate cut. We discuss the expectations, the impact of the Fed’s new policy, and the potential successor to Powell—developments that could affect the crypto market.

Arthur Hayes predicts that the recent low at $80,000 was the bottom for bitcoin, citing macroeconomic factors such as the end of quantitative tightening and increased bank lending. Meanwhile, the Fed is expected to cut rates, which could boost the crypto market.

The crypto market turned optimistic after the probability of a December Fed rate cut nearly doubled, sparking hopes that bitcoin’s recent decline may have bottomed out.

The crypto market is on track for a third straight week of losses, with over $3.2 billion pulled from major crypto funds in three weeks. Bitcoin and Ethereum are the hardest hit, but there’s growing hope for a Federal Reserve rate cut.

Bitcoin has been falling, but a potential rate cut by the Federal Reserve in December could reverse the trend. Experts see the current situation as bullish for Bitcoin.