- Bitcoin traders turned optimistic after rate-cut odds jumped to 69.4% in a single day, lifting market sentiment.
- Dovish comments from New York Fed President John Williams fueled the sudden shift, though some analysts urged caution.
- Bitcoin may remain stuck between $60k and $80k if the Fed holds rates steady despite rising expectations for a cut.
Bitcoin traders got a sudden dose of optimism on Friday after the odds of a US Federal Reserve rate cut shot up almost overnight. The shift came at a time when BTC had been sliding for days, dropping more than 10% over the week and hovering around $85,071, which… didn’t exactly calm anyone’s nerves. But once the CME FedWatch Tool showed the odds of a December rate cut jumping to 69.40% from just 39.10% a day earlier, the mood across the space flipped pretty fast, maybe even a bit too fast. Traders started hoping that a policy shift might steady Bitcoin and maybe help nudge it out of its recent slump.
Market Reacts to Dovish Fed Signals
The big trigger behind that sudden leap in expectations was a set of comments from New York Fed President John Williams. He hinted that rate cuts could come soon without disrupting progress on inflation, and the market basically ran with it. Bloomberg’s Joe Weisenthal pointed to those remarks as the main reason futures traders shifted their expectations so drastically. Meanwhile, social media was buzzing with excitement as traders tried to read between the lines and spot early signs of a bottom. Some analysts, like Moritz, wondered whether the shift could finally mark the turning point Bitcoin needed. Others were a lot more direct about it, saying rate cuts are “usually bullish” for BTC and risk assets in general, which explains the sudden wave of upbeat chatter.
Analysts Warn Against Excessive Optimism
Still, not everyone is buying the hype just yet. Veteran economist Mohamed El-Erian cautioned investors that the reaction might be a bit over the top, especially considering all this optimism is based on one speech. He warned traders not to get carried away with expectations that might not materialize. Coinbase Institutional added its own layer of skepticism, noting that futures markets may have undervalued the risk of a cut earlier but still shouldn’t treat it as guaranteed. They also pointed out that tariff effects tend to slow inflation and can push central banks toward easing—so yes, a rate cut is possible, but not entirely locked in either.
Bitcoin May Stay Range-Bound if Rates Hold Steady
Even with all the excitement, analysts say Bitcoin may not break out of its holding pattern unless the Fed actually makes a decisive move. Research from XWIN Japan suggested BTC could remain trapped between $60,000 and $80,000 if the central bank keeps rates where they are. Inflation concerns remain a major obstacle, and the Fed has been pretty firm about staying cautious. That means the market’s fresh optimism, while understandable, could end up fading if policy doesn’t shift in December. For now, traders are hanging on every signal, hoping this is the start of a broader turnaround… though it may be just a bit early to celebrate.
