Early morning! Federal Reserve, major announcement! Bitcoin faces significant correction, what will happen next?
Last night, the Federal Reserve released the minutes of the November monetary policy meeting, and the market expects the Federal Reserve to continue cutting interest rates in December. However, this is contingent on the U.S. inflation rate continuing to decline to 2%, and a stable labor market.
After Trump was elected President of the United States, the Federal Reserve's stance changed, with "multiple" decision-makers supporting a gradual interest rate cut, and even some officials mentioning the possibility of pausing actions. This meeting resulted in a 25 basis point cut, bringing the federal funds rate target range down to 4.5% - 4.75%.
The price of Bitcoin experienced a significant correction, briefly falling below the $91,000 mark. The entire blockchain concept in U.S. stocks saw a certain degree of decline. Bitcoin has been rising since election day, with almost no corrections, but the $100,000 mark remains a huge psychological barrier. After the election, due to the market's optimistic expectations of Trump's support for cryptocurrency policies, Bitcoin surged, and traders subsequently took profits.
For the outlook, I believe the target of reaching $100,000 or even $125,000 by the end of the year has not changed. Firstly, institutional demand for Bitcoin remains strong. Since the beginning of this month, following the U.S. elections, the Bitcoin spot ETF has accumulated about 77,000 Bitcoins, while MicroStrategy has additionally purchased 134,000 Bitcoins.
Secondly, the Federal Reserve is likely to cut interest rates again in December, further releasing liquidity. Before Trump officially takes office on January 20, speculation will continue.
