Bitcoin edged higher on Sunday, regaining its $90,000 price tag, as traders awaited the Federal Reserve’s final interest rate decision of the year and this week’s latest employment data.
The world’s largest cryptocurrency rose 1.8% on the day to $91,950, according to CoinGecko data, and has since recovered from lows near $85,000 in early December. The asset is up 5.3% this month.
Bitcoin trading stuck in tight range $19 billion Leverage was exhausted in early October amid concerns that inflation could complicate the Fed’s path to future rate cuts.
Michael Wu, CEO of Amber Group, said: “Changes in interest rate expectations are impacting Asia’s cryptocurrency financing market much faster than traditional asset classes.” Decrypt.
“We are seeing funding spreads and borrowing costs moving in tandem with global rate guidance,” Wu added. “This is driving a critical re-evaluation of financial strategies; as the macro cycle accelerates, many sectors are diversifying liquidity across CeFi and DeFi venues to withstand volatility and optimize opportunities. “
Meanwhile, services inflation has fallen from last year’s peak but remains higher than goods prices, and housing prices remain above the Fed’s target.
The uneven progress complicates the Fed’s deflation plans and has traders wary of the depth and pace of rate cuts, including the central bank’s final annual decision on Wednesday.
As this setup affects investor sentiment, gold and silver have soar, Bitcoin, on the other hand, has languished as the digital asset remains more sensitive to macro shocks than U.S. stocks.
Volatility among short-term Bitcoin holders could accelerate recovery above key levels
“Low liquidity continues to be an issue in the market,” said Ryan McMillin, chief investment officer at Merkle Tree Capital. Decrypt. “Since the October 10 incident, order books have been emptied and market makers are unwilling to regain scale.”
Economists expect initial jobless claims to surge by 30,000 on Thursday, up from 191,000 previously reported, MarketWatch data showed.
Now that economic data releases are back on track, that could bolster the Fed’s case for a rate cut delay Caused the longest government shutdown in U.S. history.
Precious metals soar, Bitcoin stalls as investors hedge against Fed ‘policy mistakes’
The Fed’s lowering of the funds rate is often seen as a boon for risk assets as borrowing becomes cheaper, potentially causing a rally in risk assets including cryptocurrencies, or so the thinking goes.
