QCP Capital Forecasts 25 Basis Points Rate Cut By Fed Tonight, Observes Decline In Liquidity Across Markets
In Brief
QCP Capital notes that the Fed’s meeting is unlikely to strongly impact the market, but the decrease in liquidity across all markets could lead to volatile moves, potentially resulting in large liquidations.
Singapore-based cryptocurrency trading firm QCP Capital released a market analysis highlighting that the last Federal Reserve meeting of 2024 will take place tonight. Despite the festive Christmas season, the firm sees little cause for optimism. The Federal Reserve is expected to reduce rates by 25bps and release the final dot plot of the year.
QCP Capital anticipates that tonight’s statement and dot plot will carry a slightly hawkish tone, reflecting the stabilization of US inflation above the Federal Reserve’s 2% target, alongside a strong labor market. The statement is likely to remain non-committal on the future path of rate cuts in 2025 while emphasizing the challenges associated with accelerating rate reductions. The dot plot, however, is expected to suggest three rate cuts in 2025.
Although the firm doesn’t expect the agency’s meeting to considerably impact the market, it notes that liquidity across all markets has been gradually decreasing. This reduction could lead to volatile moves, possibly resulting in large liquidations. The technical outlook for BTC appears cautious as well, with the cryptocurrency forming an evening star pattern on the daily chart and showing bearish divergences.
The firm advises against being shaken out of positions if a drop occurs, as 2025 could potentially be a bullish year for cryptocurrencies, especially with the prospect of Donald Trump in office. Staying the course could be a wise strategy, they concluded.
Bitcoin Trades At $104,282 As Market Experiences Decline Amid Moderate ETF Inflows
As of the latest data, Bitcoin is trading at $104,282, marking a 2.77% decline in price over the past 24 hours. The cryptocurrency’s 24-hour low and high were $103,406 and $108,239, respectively. Its market capitalization is $2.06 trillion, with a trading volume of $77 billion. Bitcoin’s market dominance stands at 56.53%.
According to SoSo Value, spot Bitcoin exchange-traded funds (ETFs) have seen a total net inflow of $494 million, with Grayscale contributing $4.45 million and Fidelity seeing approximately $4 million. The largest single-day net inflow was recorded by BlackRock’s fund, which saw an inflow of $741 million.
On the broader market, the total market capitalization has decreased by approximately 2.68%, now at $3.65 trillion, while trading volumes have risen slightly by 0.67% to $205 billion. The Fear and Greed Index indicates extreme greed, registering a score of 80, according to data from CoinMarketCap.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
