Bitcoin (BTC) Retests $100,000 on Fed Rate Cut Expectations: Details

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As a seasoned analyst with over two decades of experience in financial markets, I’ve witnessed the rise and fall of numerous trends and cycles. The current surge in Bitcoin (BTC) to retest the $100,000 mark is a testament to the resilience and potential of this digital asset.

Once more, Bitcoin (BTC) approached the $100,000 milestone, propelled by increased optimism stemming from speculations about possible reductions in interest rates by the Federal Reserve.

On this particular Wednesday, I witnessed Bitcoin surging to an impressive peak of $101,201 amid a session that saw a turnaround from two consecutive days of decline. This upturn can be attributed to strengthening anticipation surrounding a potential Federal Reserve interest rate reduction, which seems to have positively influenced investor confidence. Moreover, the stability in U.S. consumer-price inflation has fueled speculation among investors, leading them to increase their bets on a possible decrease in rates.

Yesterday, the Bureau of Labor Statistics released their Consumer Price Index report for November. This report indicated a yearly inflation rate of 2.7%, with a 0.3% rise observed compared to October.

Core inflation, excluding food and energy prices, was 3.3% annually and 0.3% monthly. These figures were consistent with the Dow Jones consensus estimates.

The report is released prior to the Federal Reserve’s upcoming policy decision next week, at which point they will announce any potential interest rate reductions. There is a high likelihood that the Fed could lower rates even more during this meeting, with traders estimating a 99% probability of a minor rate cut, though there is speculation that the Fed may choose to defer a rate cut in January as they assess the effects of previous cuts on the economy.

Investors eagerly await the release of new economic data, particularly the upcoming Producer Price Index report set for Thursday.

At the time of reporting, one Bitcoin was trading for approximately $100,839, marking a substantial 4.9% increase from the previous day, which is its highest daily gain in about two weeks.

Bitcoin predicted to reach $200,000

On December 5th, following a total of 5,256 business days, the value of one Bitcoin surpassed $100,000 for the initial time. For a brief instant, the overall market capitalization surged past $2,000,000,000.

After surpassing the $100,000 milestone in a recent retest, Bitcoin has touched new heights at $101,984 on Wednesday and $101,953 today. The question now is, where will Bitcoin’s trajectory lead next?

2024 was a significant milestone in the world of cryptocurrency, and there’s high anticipation that 2025 could usher in a golden age for digital currencies, according to Bitwise, a Bitcoin ETF issuer. Bitwise has shared ten forecasts for the coming year, with expectations of increased investments in Bitcoin ETFs and a Bitcoin price surpassing $200,000 being among them.

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2024-12-12 18:09