- Bitcoin and cryptocurrency prices have declined after early-week bullish momentum failed to continue.
- Kevin O’Leary predicts the Federal Reserve will not cut interest rates in December, influencing bitcoin’s price outlook.
- Market expectations currently favor a 25 basis point rate cut, with nearly 90% probability priced in by traders.
- The Bitcoin Price dropped near $90,000 after surging towards $100,000 following Elon Musk’s prediction.
- The upcoming release of the Personal Consumption Expenditures (PCE) price index is critical for future market direction.
Bitcoin and cryptocurrency prices fell after initial optimism earlier this week did not lead to sustained market gains. Despite a significant announcement from BlackRock, bitcoin’s price failed to hold above $100,000 and dropped to nearly $90,000.
Kevin O’Leary, a star investor from Shark Tank, forecasted that the U.S. Federal Reserve will not reduce interest rates in December. This contrasts with the market’s high expectation of a 25 basis point cut, which traders have priced in at nearly 90% probability.
O’Leary told Cointelegraph, “I don’t actually think the Fed’s going to cut in December.” He cited persistent inflation and the Federal Reserve’s dual mandate of full employment and inflation control. O’Leary also added that the potential rate cut would not affect his long-term bitcoin investment strategy.
Traders are closely monitoring the upcoming release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure. As noted by Bitunix analysts in an emailed report, bitcoin is currently trading within a tight range between $91,000 and $95,000. They stated, “If the data confirm continued disinflation, the probability of a year-end rebound will rise; otherwise, the choppy structure is likely to persist.” Disinflation refers to a slowing in the rate of inflation, which could influence the Fed’s decision on interest rates.
Market confidence weakened as bitcoin’s price fell sharply from a record high of $126,000 per bitcoin. Robin Singh, CEO of Koinly, commented in an email, “There is a lot of speculation around the upcoming U.S. Federal Reserve rate decision, where another rate cut could further keep momentum moving in the right direction.” Singh cautioned investors, saying, “We’ve seen many market fakeouts before, where bitcoin quickly gives back most of its gains.” He also noted December’s historical tendency for low bitcoin price activity and that another decline following this recent rally could hurt market sentiment.
The market now awaits clear signals from inflation data and the Fed’s policy decisions to determine the short-term trajectory for bitcoin and cryptocurrency prices.
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