QCP Capital: Market Anticipates Three Rate Cuts In 2025 Following Fed’s Scaling Back Of ‘Quantitative Tightening’
In Brief
QCP Capital released a crypto market analysis, noting that the key factor behind Bitcoin’s sharp rally past $85,000 was the Federal Reserve’s decision to reduce its “quantitative tightening” program starting in April.
Singapore-based cryptocurrency trading firm QCP Capital released a cryptocurrency market analysis noting that the FOMC meeting held last night provided the market with the upside catalyst it had been waiting for, driving BTC past $85,000 in a sharp rally.
The key factor behind this movement was the Federal Reserve’s decision to reduce its “quantitative tightening” program starting in April. Markets interpreted this move as an indirect rate cut, which reinforced expectations that the Federal Reserve might start easing rates as early as June. At the time of writing, the market is pricing in three rate cuts for 2025, expected in June, September, and December.
However, QCP Capital notes that beyond the immediate market reaction, the Federal Reserve‘s tone was notably cautious. Policymakers lowered their economic growth projections to 1.7%, down by 0.4%, while increasing their inflation forecast to 2.8%, indicating a growing risk of stagflation. Additionally, the agency’s dot plot revealed a shift toward a more hawkish stance compared to the December meeting, with more officials now forecasting no rate cuts in 2025, increasing to four.
On the options side, market positioning has returned to normal, with the skew shifting back toward calls. This is a contrast to earlier in the week when the skew favored puts. The crucial test now comes at tonight’s US open which will reveal whether the rally will continue, or the investors will come to terms with the reality that risks still remain.
Bitcoin Trades At $85,000, While Crypto Sector Sees Notable Gains
As of the current writing, Bitcoin is trading at $85,844, reflecting an increase of over 2.63% in the past 24 hours. Its highest point during this period was $87,427, while the lowest was $83,399. Bitcoin’s market dominance is currently at 60.61%, showing a slight decrease of 0.09% from the previous day.
In the broader cryptocurrency market, the total market capitalization stands at $2.81 trillion, marking a 2.92% increase over the past 24 hours. The total trading volume for the cryptocurrency market over the last day is $104.75 billion, representing a 50.82% rise, 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.
