Fed Rate-Cut Odds Reach 71%, but Bitcoin Could Drop Further

Market Overview - Bitcoin (BTC) has increased nearly 8% since last Friday, recovering from recent lows near $80,500, as market odds for a Fed rate cut in December have jumped [1] - The price of BTC traded at $86,947 at the time of writing, reflecting a 1.07% increase over the past day [2] Monetary Policy Impact - Market expectations for a December rate cut have fluctuated, with a 90% chance at the start of November, dropping to 30%, and rebounding to over 70% [3] - The CME FedWatch Tool indicates a 71% chance of a 25-basis-point cut at the Fed's December 10 meeting, following a previous cut in October [4] - The Fed's announcement to end quantitative tightening on December 1, 2025, signals rising liquidity and lower borrowing costs, which could strengthen demand for risk assets like Bitcoin [5] On-Chain Data Analysis - On-chain data suggests Bitcoin may be nearing a potential bottom, with a significant surge in BTC being moved off exchanges, historically a positive market sentiment indicator [6] - Swissblock Technologies has identified a noticeable decline in its Risk-Off Signal, indicating that the worst of the capitulation may be ending, supporting the notion that Bitcoin is forming a new bottom [7] Market Sentiment and Future Outlook - Analysts suggest that the next week is critical for Bitcoin, as continued fading of selling pressure could signal a reliable bottom, often marked by a second selling wave that is weaker than the first [8]