Bitcoin surged to a record high above $106,000 before retreating amid concerns about the upcoming US Federal Reserve rate cut. The Fed is expected to reduce borrowing costs by 25 basis points to 4.25-4.5% range, marking a total easing of 100 basis points since September.
While some observers believe the Fed will trim forecasts on rate cuts, others think there’s a chance for a “hawkish” move with less rate hikes next year than anticipated. This could lead to higher Treasury yields and the dollar, potentially impacting Bitcoin’s recent run higher.
However, seasonality is bullish for Bitcoin, and President-elect Trump’s positive regulatory vibes may offset any negative impact from the Fed’s decision. Moreover, an expected easing from China will keep the bull case intact for the cryptocurrency.
A key data point to watch is the latest core PCE reading, due out later this week, which will reveal whether recent upticks in consumer price inflation are a fluke or signs of a genuine rebound.
Source: https://www.coindesk.com/markets/2024/12/16/bitcoin-soars-to-record-high-above-106-k-then-retreats-as-hawkish-fed-rate-cut-looms