Bitcoin hits an all-time high, but analysts warn of potential risks
After the Fed announced the rate cut, Bitcoin prices reached a new all-time high, close to $77,000. According to Cointelegraph Markets Pro and TradingView data, Bitcoin prices rose slightly and stabilized after the daily close. Especially during Wall Street trading hours, Bitcoin prices suddenly surged, breaking through $77,000 on Bitstamp.
This price fluctuation occurred against the backdrop of the Fed's anticipated 0.25% interest rate cut, and Fed Chairman Jerome Powell stated after the latest FOMC meeting that economic activity continues to expand, the labor market has generally slowed, and although unemployment has increased, it remains at a low level.
Analysis warns: Bulls face liquidation risks
Despite the optimistic sentiment brought by Bitcoin's rise, analysts also warn that if the market experiences a sudden reversal, the sharp price fluctuations could lead to large-scale liquidation risks for the bulls. Investors should be cautious, especially during periods when market sentiment is sensitive.
Inflation stabilizes, and the Federal Reserve may further cut rates
Fed Chairman Powell stated that although the inflation rate is close to the target of 2%, it is still slightly above expectations. According to Cointelegraph, the market remains consistent in its view of the Fed's policy direction, with widespread predictions that the Fed will again cut rates by 0.25% at the December FOMC meeting. The expectations for the next rate cut are relatively clear according to the FedWatch tool from the Chicago Mercantile Exchange Group.
Risk of rising inflation
However, analysis resources such as the Kobeissi Letter indicate that if long-term inflation trends rise, the Federal Reserve may face pressure to change its policy. They stated in a dedicated post on platform X that although the current inflation rate is 2.1%, any further increase could pose a threat to the Fed's policy shift. They remind investors that economic conditions could change unpredictably as we enter 2025.
Bitcoin faces price squeeze risks
Despite Bitcoin reaching an all-time high and refreshing the highest daily closing price, the market has not shown concerns about the macroeconomic situation. The risks brought by high-leverage liquidity may exert a squeezing effect on Bitcoin prices, and investors need to be wary of potential market volatility.
According to monitoring platform CoinGlass, as of now, BTC/USD has risen 8% in November, and the fourth quarter has seen an increase of 19.6%. At the same time, CoinGlass noted that liquidity on both sides of the spot price on the exchange order book has significantly increased, indicating a rise in market activity.
In analyzing the market environment, a trader mentioned that 'high-leverage liquidity' may bring risks, suggesting that 'wait and see' is the best strategy under current circumstances. Analysts pointed out that although the market is overheated, there may be a short-term rise before an adjustment. If a pullback occurs, the support level at $72,600 will be critical, and falling below this level might change market sentiment. Many traders are concerned about the possibility of 'bull squeeze', meaning a wave of BTC long liquidations, before the close of this week.
Bitcoin hits an all-time high, but analysts warn of potential risks
After the Fed announced the rate cut, Bitcoin prices reached a new all-time high, close to $77,000. According to Cointelegraph Markets Pro and TradingView data, Bitcoin prices rose slightly and stabilized after the daily close. Especially during Wall Street trading hours, Bitcoin prices suddenly surged, breaking through $77,000 on Bitstamp.
This price fluctuation occurred against the backdrop of the Fed's anticipated 0.25% interest rate cut, and Fed Chairman Jerome Powell stated after the latest FOMC meeting that economic activity continues to expand, the labor market has generally slowed, and although unemployment has increased, it remains at a low level.
Analysis warns: Bulls face liquidation risks
Despite the optimistic sentiment brought by Bitcoin's rise, analysts also warn that if the market experiences a sudden reversal, the sharp price fluctuations could lead to large-scale liquidation risks for the bulls. Investors should be cautious, especially during periods when market sentiment is sensitive.
Inflation stabilizes, and the Federal Reserve may further cut rates
Fed Chairman Powell stated that although the inflation rate is close to the target of 2%, it is still slightly above expectations. According to Cointelegraph, the market remains consistent in its view of the Fed's policy direction, with widespread predictions that the Fed will again cut rates by 0.25% at the December FOMC meeting. The expectations for the next rate cut are relatively clear according to the FedWatch tool from the Chicago Mercantile Exchange Group.
Risk of rising inflation
However, analysis resources such as the Kobeissi Letter indicate that if long-term inflation trends rise, the Federal Reserve may face pressure to change its policy. They stated in a dedicated post on platform X that although the current inflation rate is 2.1%, any further increase could pose a threat to the Fed's policy shift. They remind investors that economic conditions could change unpredictably as we enter 2025.
Bitcoin faces price squeeze risks
Despite Bitcoin reaching an all-time high and refreshing the highest daily closing price, the market has not shown concerns about the macroeconomic situation. The risks brought by high-leverage liquidity may exert a squeezing effect on Bitcoin prices, and investors need to be wary of potential market volatility.
According to monitoring platform CoinGlass, as of now, BTC/USD has risen 8% in November, and the fourth quarter has seen an increase of 19.6%. At the same time, CoinGlass noted that liquidity on both sides of the spot price on the exchange order book has significantly increased, indicating a rise in market activity.
In analyzing the market environment, a trader mentioned that 'high-leverage liquidity' may bring risks, suggesting that 'wait and see' is the best strategy under current circumstances. Analysts pointed out that although the market is overheated, there may be a short-term rise before an adjustment. If a pullback occurs, the support level at $72,600 will be critical, and falling below this level might change market sentiment. Many traders are concerned about the possibility of 'bull squeeze', meaning a wave of BTC long liquidations, before the close of this week.
