Market Overview

Crypto market analysts suggest Bitcoin may continue its recovery after bottoming out at just above $82,000 on Friday. Tech stocks and crypto markets have experienced a downturn over the past two weeks due to fluctuating market expectations regarding a potential rate cut, according to Capriole Fund founder Charles Edwards.

Analysts at Swissblock believe Bitcoin has taken its first step toward forming a bottom, citing a sharp decrease in the Risk-Off Signal. This indicates easing selling pressure and the likelihood that the worst of the capitulation is behind us, at least for now. However, they caution about the potential for a second, weaker selling wave, which could ultimately signal a shift in control back to the bulls.

Federal Reserve Rate Cut Prospects

The probability of a Federal Reserve rate cut in December has rebounded to 70%, after falling to around 30% last week. This reflects a shift in market sentiment, as demonstrated by the CME Fed Watch Tool.

Imminent Liquidity Injection

Some analysts predict that the Federal Reserve will announce measures to manage reserves, effectively expanding liquidity in the market. They argue that liquidity injection is essential to avoid financial crises and that betting on a year-long bear market is essentially betting on the bankruptcy of the United States.

Impact on Cryptocurrency Market

Interest rate cuts and increased liquidity are generally considered bullish for high-risk assets like cryptocurrencies. Previous periods of quantitative easing have been followed by significant rallies in these assets.


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

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