Crypto’s Next Rally on Hold as BoJ and Federal Reserve Stay Hawkish on December Outlook

Core Insights - The anticipated rebound in the crypto market has not occurred, with Bitcoin (BTC) and Ethereum (ETH) facing pressure due to macroeconomic uncertainties [1][6] - Recent policy announcements from the Federal Reserve and the Bank of Japan have created a cautious environment, delaying expectations for global monetary easing [2][4] Group 1: Central Bank Actions - The Federal Reserve's October rate cut of 0.25% was its second easing this year, but the outlook for future cuts was reduced from four to two by 2026, indicating a "higher for longer" interest rate environment [3][4] - The Bank of Japan maintained steady rates but expressed concerns over global inflation and U.S. trade policies, prioritizing inflation control over growth [4] Group 2: Market Reactions - Following the Fed's remarks, the crypto market experienced significant sell-offs, with Bitcoin dropping below $107,000 and Ethereum falling into the $3,600 range, resulting in over $700 million in liquidations across major exchanges [5][6] - The crypto market's stagnation followed a mid-October flash crash that wiped out over $19 billion in leveraged positions, with altcoins plummeting up to 60% [7] Group 3: Investor Sentiment - The renewed hawkish stance from central banks has led to increased caution among investors, pushing many traders to the sidelines as ETF inflows decreased by nearly $1 billion [7][8] - As November approaches, the crypto market remains in a holding pattern due to mixed signals from central banks and resurfacing global trade tensions [8]