Fed rate cut expectations drive Bitcoin higher; Ethereum rises over 6%

Source: BlockMedia Original Title: [Market Watch] Bitcoin Rises on US Rate Cut Expectations… Ethereum Up 6% Original Link:

On the 10th, Bitcoin fluctuated around $92,000 ahead of the US Federal Open Market Committee (FOMC) meeting. Early in the morning, it briefly rose to $94,588 before slightly declining.

At 8:25 a.m. that day, Bitcoin (BTC) on domestic digital asset exchanges was up 0.01% from 9 a.m. the previous day, trading at 137.43 million KRW. At the same time, a leading exchange quoted $92,792, up 2.35%. Ethereum (ETH) rose 6.59% to $3,323, and Ripple (XRP) rose 1.91% to $2.11.

According to CoinGlass data, about $169.02 million (about 248.5 billion KRW) in Bitcoin positions were liquidated in the past 24 hours, with about 80.2% being short positions. The entire digital asset market saw about $434.28 million (about 638.7 billion KRW) liquidated.

The entire market rebound has been interpreted as a response to expectations of interest rate cuts. The US Federal Reserve (Fed) will hold the Federal Open Market Committee (FOMC) at 4 a.m. on the 11th (Korea time) to decide the benchmark interest rate. The market broadly expects a 0.25% rate cut at this meeting. According to FedWatch data from the Chicago Mercantile Exchange (CME), the probability of a rate cut reached 89.4%.

Investor focus has shifted from the expected rate cut to next year’s rate trajectory and signals from the Fed. This FOMC meeting will also release the Summary of Economic Projections (SEP) and the dot plot. An investment analyst said, “A rate cut is almost certain, but the Fed’s economic outlook and the Fed chair’s remarks will have a significant impact on the market,” predicting, “This will not only affect this week but could also shape market trends for the rest of the month.”

On the other hand, as rate cut expectations have been largely priced in, attitudes toward further upside have become cautious. Major Wall Street institutions have recently lowered their Bitcoin price targets. Standard Chartered Bank has cut its outlook for Bitcoin next year from $300,000 to $150,000, a 50% reduction. This reflects weaker Bitcoin purchasing power from corporate treasuries and a slowdown in spot Bitcoin ETF inflows.

However, Standard Chartered Bank stated, “Purchases by corporate treasuries seem to be largely complete, and ETF inflows will be intermittent,” expecting a price adjustment phase rather than a large-scale sell-off.

Investment bank Bernstein also predicts that Bitcoin will reach $150,000 by the end of next year and $200,000 by the end of 2027. The firm previously projected $200,000 by year-end but revised its forecast after a market correction. Nonetheless, Bernstein remains optimistic, stating, “Bitcoin is surpassing the four-year cycle and entering a long-term upward phase.”

In addition, Alternative’s Fear & Greed (Fear&Greed) Index, which represents investor sentiment in the digital asset market, was at 22 points (Fear) for the day, up from the previous day. The Alternative Fear & Greed Index indicates that the closer to 0, the stronger the selling pressure; the closer to 100, the stronger the buying tendency.