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A slight interest cut is expected, compared to the current rate.
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Santiment makes bullish projections for Bitcoin.
The economic calendar set for this week suggests a period of high volatility for markets, including bitcoin (BTC) and cryptocurrencies. Above all, the interest rate decision of the Federal Reserve (Fed), Central Bank in the United States, scheduled for Wednesday, December 18, unleashes this possibility.
According to expectations surveyed by CME Group, there is a 97.1% probability of a 25 basis point rate cut. This would place them at a total of 425-450 basis points.
Thus, the third consecutive softening of monetary policy in the United States would be consecrated. The previous two were in September and August, beginning with a period of cuts for the first time since the pandemic.
Markets reacted upward to previous reductions, so optimism is expected to expand if such a trend continues this week. Furthermore, with a cut of only 25 basis points expected, it reflects expectations that the economy does not need a tough measure to boost itself.
According to analytics firm Santiment, the forecast suggests the U.S. and global economy could thrive with lower interest rates. Therefore, as CriptoNoticias reported, see a positive scenario standing for prices bitcoin and the cryptocurrencies.
“Cryptocurrencies, closely linked to stock markets, have already reacted positively and can gain even more once the cuts are confirmed next week,” says Santiment.
Latest interest rate decisions in the United States and forecast. Fountain: Investing.
A drop of interest rates It implies lower cost of credit and, consequently, greater liquidity in the economy. Consequently, it means the possibility of more capital entering the markets, as long as there are no signs of economic weakness.
The probability of a 25 basis point cut increased after the consumer price index (CPI) in the United States was released. This report, which was published last Wednesday, indicated an annual increase of 2.6% to 2.7%.
The expected cut also coincides with the first week in which the shares of MicroStrategy, a company with the most bitcoin in its treasury, are listed within the Nasdaq 100 index (NDX).. “Poetic”, considered In this regard, Mauricio Di Bartolomeo, economist and co-founder of Ledn, a bitcoin loan company.
NDX is one of the main indices that Americans invest in, as it compiles the stocks of the top 100 companies listed on Nasdaq. In such a way, the MicroStrategy entry to your list may involve greater indirect exposure to the bitcoin market.
Japan, United Kingdom and Mexico will also decide interest rates this week
On the same day as the United States rate decision, Japan’s will also be announced.. In addition to this, on Thursday, December 19, those from the United Kingdom and Mexico will be presented. Consequently, this may bring some turmoil to the markets in the global dynamics.
On Friday, December 20, the personal consumption expenditure (PCE) of the United States will also be published. Unlike the CPI, which measures the price change of a fixed basket of goods and services, this other metric is based on components paid by consumers without taking into account the volatility caused by food and energy.
The PCE is the Fed’s preferred inflation indicator to define US monetary policy. Therefore, its result can provide relevant data for the next interest rate decision that can increase volatility in the markets.
With this scenario in progress, bitcoin opened the week reaching $105,000 (USD), which means a new all-time high price for the currency. This advances the positivism experienced in the market, which could worsen if the expected economic results materialize.
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