Analyzing if crypto can hold despite ‘5% chance’ of a Fed rate cut
Markets were pricing a very low probability of a rate cut at the upcoming FOMC meeting.
Why such a low probability? Despite falling inflation and a weaker December jobs report, concerns over persistent price pressures kept the Fed on hold.
This high-rate outlook continues to weigh on risk assets, such as Bitcoin [BTC] and other cryptocurrencies, raising the opportunity cost of non-yielding investments.
A mere 5% probability
According to the CME FedWatch Tool, there was a mere 5% probability of a 25 basis point (bps) Federal Reserve rate cut at the upcoming FOMC meeting.
Source: CME FedWatch Tool
Notably, Polymarket data also reflected a 95% probability that the Fed would hold rates steady.
Source: Polymarket
What’s driving…
