According to CME FedWatch data, the probability of the Federal Reserve raising interest rates at its meeting on December 9 is fully priced at 100% as of November 12. This expectation has emerged as an added pressure factor on the already subdued cryptocurrency market. Recently, Bitcoin has experienced significant pullbacks, prompting speculation that the market may not yet fully feel the impact of this anticipated policy shift.
Interest Rate Concerns Limit Appetite for Risky Assets
Cryptocurrency assets maintain strong ties with traditional markets and the global economy. The prospect of interest rate hikes typically curtails investors’ willingness to delve into higher-risk assets. Thus, the pressures on Bitcoin and altcoins are not solely a result of developments unique to the crypto space but are also shaped by macroeconomic conditions.
FedWatch data reveals that the rate hike is more an expectation priced into futures markets rather than a surprise.
However, the likelihood of an interest rate increase might not necessarily herald a fresh and abrupt market shock. The FedWatch indicator reflects market expectations in futures trading rather than the decision itself. Consequently, the scenario suggests a continuation of current market fragility rather than introducing a profound new volatility.
Bitcoin’s Decline Persists with an Eye on $70,000 Benchmark
Currently trading around $72,744, Bitcoin hovers below prominent moving averages on the daily chart. Analysts suggest that slipping below the $70,000 mark may not automatically trigger a substantial sell-off. The recent downturn’s prominence hints that part of the selling pressure may already be factored into current price levels.
Another underlying factor in market weakness is the perceived lack of adequate returns relative to risk. Compared to tech stocks and artificial intelligence, Bitcoin and cryptocurrencies have recently seemed less attractive, with capital favoring these sectors, further weighing down on digital assets.
Outflows Continue as New Catalysts Sought for Recovery
The market’s imbalance between inflows and outflows persists, with sustained fund withdrawals observed in many of the top 15 cryptocurrencies. Security concerns, deteriorating investor sentiment, and weak recovery expectations bolster this trend.
This view is supported by data from platforms tracking derivatives markets, on-chain movements, and ETF behaviors such as Coinglass, CryptoQuant, and SosoValue. Coinglass monitors crypto derivatives, CryptoQuant tracks on-chain data and exchange flows, and SosoValue observes ETF trends.
A meaningful market recovery requires new use cases and strong catalysts. Its confirmation lies in observing higher price peaks and steady inflows into institutional products like ETFs.
