Odds of December rate cut back above 70%: Are Bitcoin traders convinced this changes things?
Market odds for a December Fed rate cut have surpassed 70%, but Bitcoin traders remain cautious despite the potential macro tailwind.Summary
The probability of the Federal Reserve cutting interest rates by 25 basis points in December has surged above 70%, largely due to recent dovish comments from New York Fed President John Williams, who suggested cuts are viable without jeopardizing the 2% inflation target. This shift reverses a previous downtrend in rate-cut expectations, which had fallen to 30%. A rate cut is historically bullish for Bitcoin (BTC) as it compresses inflation-adjusted real yields and expands global liquidity, conditions that favor high-beta assets. However, current on-chain and derivatives data suggest the Bitcoin market has not yet priced in this positive macro shift. Recent buyers are underwater, US spot ETFs are experiencing outflows, and options traders are paying high premiums for downside protection, indicating defensive positioning. For Bitcoin to rally significantly, the December cut must be accompanied by forward guidance signaling further easing, making the path toward lower real yields credible. If the Fed delivers only a single cut without clear future signals, the macro impulse may be too weak to overcome current market fragility and institutional caution.
(Source：CryptoSlate)