Bitcoin (BTC) surged to over $106,000 in early Asian hours, setting new all-time highs before quickly retreating to $104,500 amid concerns about the upcoming U.S. Federal Reserve (Fed) rate cut.
However, there are concerns that the accompanying Fed commentary will seek to temper expectations for further easing, potentially diminishing the bullish impact of the rate cut.
The Fed will announce its rate decision, the dot plot, comprising interest rate projections, and economic forecasts on Dec. 18 at 14:00 ET.
The previous dot plot released on Sept. 18 showed 2.5 points of rate cuts by the end of 2026, pushing the borrowing cost below 3%.
Besides, the Fed rate cuts will still remain on the table alongside an expected easing from China, keeping BTC’s bull case intact.
Before swiftly falling to $104,500 due to worries about the impending U.S. election, Bitcoin (BTC) shot up to over $106,000 in early Asian hours, setting new all-time highs. S. . rate reduction by the Federal Reserve (Fed).
The U. S. The central bank is anticipated to lower the benchmark borrowing cost by 25 basis points, bringing it down to the range of 4 to 5 percent. This would be the 100 basis point easing since September. But there are worries that the Fed’s accompanying commentary will try to lower expectations for additional easing, which could lessen the rate cut’s bullish effect.
The Fed’s rate decision, which includes economic forecasts and interest rate projections, will be revealed on December. 18 at 14:00 ET. A half hour later, Fed Chair Jerome Powell will give a press conference.
September saw the release of the previous . plot. By the end of 2026, 18 projected a 2 to 5 point rate cut, bringing the borrowing cost down below 3 percent. On Wednesday, some analysts think the Fed will lower these projections.
Treasury yields and the dollar are expected to continue their recent upward trend if the projections indicate slower or fewer rate cuts. This could make it more difficult for risky assets, like Bitcoin, to maintain their recent level of demand.
However, seasonality is very bullish for Bitcoin, and since President-elect Trump is giving the cryptocurrency positive regulatory vibes, a possible hawkish Fed may not have a lasting effect on the price of the cryptocurrency.
Additionally, the Fed’s rate cuts and the anticipated easing from China will continue to be a possibility, maintaining Bitcoin’s bull case.
The Fed’s preferred inflation measure, the most recent core PCE reading, will be released to markets later this week. This reading will indicate whether the recent spikes in consumer price inflation are an anomaly or signs of a real inflation recovery.
