- Bitcoin faces pre-FOMC selling pressure, but optimistic buying suggests resilience and recovery potential.
- A CME futures gap near $102K offers a key focal point for price action and a potential buy-the-dip opportunity.
Bitcoin (BTC) remains below the $105,000 mark, according to recent TradingView data, as traders await the Federal Reserve’s latest interest rate announcement. FOMC is expected to reduce rates by 0.25%, based on CME Group’s FedWatch Tool.
While a previous CNF update revealed that Fed Chair Powell signaled a temporary pause, fueling rallies in Bitcoin, Ethereum, and altcoins, inflation exceeding 10% had previously forced the Federal Reserve to hike interest rates at a historic pace.
The bitcoin and crypto market is braced for the Federal Reserve to cut interest rates by 0.25% when it concludes its two-day policy meeting, with the market pricing in a 95% chance of a 25 basis point cut.
This raised debt interest payments and sparked fears of a “death spiral.” Forbes noted that the crypto market is now bracing for a 0.25% rate cut, with a 95% chance priced in by the market.
This widely anticipated decision comes amid concerns of a potential policy pivot in 2025 due to resurging inflation and a weakening labor market. Analysts at The Kobeissi Letter recently tweeted that the Fed faces a tough balancing act between controlling inflation and supporting employment, complicating its dual mandate.
This week, the Fed will cut rates by 25 basis points again as the labor market weakens.
We believe stagflation is coming in 2025, the Fed's biggest nightmare.
Subscribe at the link below to see how we are trading these developments:https://t.co/SJRZ4FrNBc
— The Kobeissi Letter (@KobeissiLetter) December 15, 2024
Pre-FOMC Selling Creates Market Pressure
Bitcoin has experienced familiar selling pressure ahead of the FOMC announcement, as risk-off sentiment dominates the market. Analyst Skew noted a decline in long positions as traders reduced exposure before the decision. Despite this, Skew highlighted strong purchase behavior, reflecting market optimism about Bitcoin’s resilience.
Spot selling activity is driving the current price action, though analysts believe bullish momentum could easily return. The pre-FOMC environment reflects caution, but underlying sentiment hints at a potential recovery post-announcement.
Futures Gap and Buy-the-Dip Opportunity
Traders are also watching a gap in Bitcoin’s CME futures market near $102,000, which could influence price action during the Fed event. While not all gaps are closed, analysts like GalaxyTrading see a high likelihood for this one to be filled.
At the time of writing, Bitcoin (BTC) is trading at $102,051.94, down 2.07% in the past day and 1.34% over the past week.
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The Fed’s decision will likely set the tone for Bitcoin’s short-term trajectory, with the market leaning towards a dip-buying opportunity. A favorable FOMC outcome could renew bullish activity, flipping sentiment back in favor of a rally.
