Bitcoin pulled back significantly from its projected 2025 yearly open price during the recent Wall Street trading session. The digital asset descended toward the $90,000 zone following the release of labor data, ignoring optimism about the Fed rate cut. According to The Kobeissi Letter, the US central bank has no other option but to lower interest rates to save consumers.
Recent data on United States jobless claims turned out to be surprisingly low, showing unexpected economic resilience. Despite this signal of strength in the labor market, investors remain firm in their expectations for a rate drop on December 10. Likewise, The Kobeissi Letter argues that even if inflation hits 3%, it is imperative to cut rates right now. On the other hand, Japan finalized a stimulus injection of $135 billion.
Disconnect between stock markets and consumer reality
The current gap between the performance of risk assets and real consumer strength is evident. While large-cap tech stocks reach new all-time highs, average citizens are struggling financially to maintain their standard of living. Furthermore, this dynamic forces investors to own financial assets or risk being left behind historically. Therefore, liquidity and the health of the general economy remain determining factors for the market’s direction.
Mosaic Asset Company warned that, although the market implies an 89% probability of a cut, this scenario is not guaranteed. There are deep divisions regarding the future path of interest rates that could inject volatility into the stock market. Thus, if the price fails to reclaim key levels like $93,500, the bearish thesis could strengthen. Material Indicators points out that it is vital to clear resistance between $96,000 and $98,000 before confirming a recovery.
What technical indicators will define the market’s course towards year-end?
The market is looking for a retest of the 50-week simple moving average to validate current trends. Material Indicators emphasized that failing to flip the yearly open into support is a negative technical signal in the short term. Finally, traders must watch the weekly close and RSI to determine if the bullish cycle can resume. Volatility is expected to continue as monetary policies are defined towards the end of the year.
