Analysts Say Easing Liquidations and Rising Fed Cut Expectations Could Support Further Upside
Bitcoin is showing renewed signs of strength after briefly dipping near the $82,000 level, with several market analysts now pointing to improving conditions that could help extend the recovery. Over the past week, heavy selling across risk assets eased notably, allowing the cryptocurrency to climb back toward the upper-$86,000 range.
After a turbulent two-week stretch, analysts say shifting expectations around U.S. monetary policy are playing a crucial role in stabilizing sentiment. Fed rate-cut odds, which fell sharply last week, have rebounded toward 70%, adding support for risk-on assets.
“Markets pulled back hard as expectations for a rate cut kept flipping, and that uncertainty hit both tech stocks and crypto,” one digital asset fund manager said. “As expectations revert, Bitcoin tends to respond quickly on the upside.”
Research firm Swissblock noted that Bitcoin may be forming a stronger base following its sharp decline. According to their latest analysis, the key Risk-Off Signal has dropped significantly, a move they say reflects cooling selling pressure and reduced panic among traders.
“The worst of the capitulation appears behind us for now, but this week remains important. We need to see selling pressure continue to fade,” the analysts explained. They added that a secondary, milder wave of selling often emerges near market bottoms. When that second wave fails to break previous lows, it typically signals seller exhaustion and a shift back toward bullish control.
Bitcoin’s recent drop to around the $80,600 mark represented its deepest pullback since mid-April and a roughly 36% correction from its early-October all-time high above $126,000.
Fed Policy Shifts Add Momentum to Market Outlook
Interest-rate expectations are also playing a pivotal role. The CME’s probability models now indicate nearly 70% odds of a December rate cut, up sharply from around 30% just days earlier. Analysts say such policy easing would inject needed liquidity into financial markets.
One market strategist commented, “The central bank will eventually have to add liquidity. Without it, the system becomes unstable.”
Historically, lower rates and increased liquidity have acted as strong catalysts for major crypto rallies, leaving analysts cautiously optimistic that Bitcoin’s rebound may have further room to run.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.