Today, the crypto market exhibited significant volatility ahead of the Federal Reserve’s interest rate decision. The market widely expects the Fed to implement its fourth rate cut of the year, but this expectation has already been priced in, leading to a “buy the rumor, sell the news” scenario with pullbacks and rebounds before and after the announcement.

Fed Rate Cut Expectations: The Core of Market Dynamics

The main driving force behind today’s market movement is the anticipation that the Federal Reserve will make a rate cut decision at its December 10 meeting. However, this expectation is not new, and its impact on the market has become more complex.

Expectations Already Priced In
Analysts point out that the market began reflecting expectations of a rate cut several weeks ago. This means that if the decision aligns with expectations, it may not provide sustained upward momentum and could even trigger a sell-off due to “the good news being fully priced in.”

High Probability of Rate Cut
According to the CME Group’s “FedWatch” tool, as of the end of November, the market’s implied probability of a 25-basis-point rate cut on December 10 had risen to around 87%.

Potential Impact of Rate Cut on the Crypto Market

Positive Impact: Rate cuts typically reduce the appeal of holding risk-free assets like the US dollar, thereby boosting demand for high-risk assets such as Bitcoin. Historically, markets have tended to respond optimistically after rate cuts.
Negative Impact: The early pricing in of rate cut expectations may result in a “buy the rumor, sell the news” scenario. In addition, the magnitude of the rate cut and follow-up comments by Fed Chair Jerome Powell (such as whether he hints at more aggressive future cuts) will directly influence market sentiment.

Key Points to Watch After the Announcement

Analysts generally believe that the real catalyst for market movement will be Fed Chair Jerome Powell’s press conference. His comments will shape market expectations for future policy direction. If Powell is dovish, it will signal the green light for further rate cuts in the market’s eyes; if he is hawkish, Bitcoin and altcoin prices could drop.
#参与创作者认证计划月领$10,000 #美联储降息预测 #十二月行情展望 #加密市场回暖 #广场发帖领$50