QCP Capital mentioned in its latest comments published on its official Telegram channel that although Christmas is approaching and the festive atmosphere is getting stronger, the market does not seem to have much reason to celebrate. "The last Fed meeting of 2024 will be held tonight," QCP said. "We expect the Fed to cut interest rates by 25 basis points and release the last dot plot of the year."
Hawkish tendency, the path of interest rate cuts in 2025 remains unclear
Although market sentiment is usually relaxed during the holiday season, QCP Capital expects that tonight's statement and dot plot may have a slightly hawkish tone. This will reflect that US inflation remains stable above the Fed's 2% target and the labor market remains strong. Regarding future monetary policy, QCP predicts that the Fed will not make a clear commitment to the path of interest rate cuts in 2025 in its statement, but will emphasize the difficulty of accelerating interest rate cuts.
In terms of the dot plot, the Fed is expected to convey expectations of three rate cuts in 2025, but the specific details will remain cautious. This means that although the market generally expects the introduction of loose policies, actual operations may still be constrained by inflationary pressures and a strong labor market.
Declining market liquidity
Although QCP Capital does not believe that the Fed's meeting will have a significant impact, they remind investors that the liquidity of the market is gradually decreasing, which may lead to increased price volatility and trigger large-scale liquidation actions. The cautious mood of market participants, coupled with the approaching Christmas holiday, may make price fluctuations more intense, and investors need to be prepared for possible market turmoil.
BTC Technical Outlook
Regarding the technical outlook for Bitcoin, QCP Capital said that an evening star pattern has formed on BTC's daily chart, and a bearish divergence signal has appeared. This means that in the short term, BTC's price may face callback pressure. However, QCP also reminds investors not to rush to liquidate positions in this volatile market environment. Although the current technical signals seem bearish, with the potential bull market in the cryptocurrency market opening in 2025, especially under the background of Trump's administration, maintaining existing positions may bring more benefits.
With the latest moves by the Federal Reserve and the decline in market liquidity, the end of 2024 may be full of uncertainty. But in such an environment, investors need to remain calm, especially in the field of cryptocurrency. The future market is still full of opportunities, especially with the arrival of a potential bull market year in the crypto market.
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