The Bitcoin price experienced a significant bounce this Friday, surpassing the 84,000 dollar mark during the morning session in the United States. John Williams, President of the New York Federal Reserve, officially suggested that there is still room to adjust monetary policy in the near term. These statements reignited investor hopes regarding an imminent rate cut for the month of December.
After suffering strong selling pressure that took the asset below 81,000 dollars, the leading cryptocurrency managed to regain ground quickly following the announcement. Markets reacted immediately to the official’s comments, raising the odds of a 25 basis point reduction to 70% on derivatives platforms. Previously, this possibility stood at barely 39%, demonstrating a drastic and swift change in current investor sentiment. Furthermore, Nasdaq 100 futures also showed moderate gains, aligning with the momentary recovery of the sector.
Can the Fed’s new stance sustain the crypto market recovery?
Recent volatility responds to a previous aggressive pivot by the central bank, which had contributed to a 30% drop from the highs. It is crucial to balance inflation control with employment, Williams highlighted in his direct statements to the Wall Street Journal to calm nerves. On the other hand, this stance contrasts with stiffer opinions from other members of the entity, such as Beth Hammack. She had recently downplayed labor concerns, focusing exclusively on financial bubble risks and persistent inflation.
The reactivation of expectations regarding a much more flexible monetary policy could offer fundamental support to stop the recent bleeding in valuation. If the rate adjustment materializes in the upcoming December meeting, the Bitcoin price could find the necessary stability to attempt to reverse the bearish trend of recent weeks. Likewise, this scenario benefits the economy in general, as it reduces the cost of credit and encourages investment in risk assets, slightly weakening the strength of the US dollar.
The market remains attentive to upcoming macroeconomic data that confirms the technical viability of this change of course in financial strategy. Although the cryptocurrency continues to register losses on the daily frame, Williams’ verbal intervention has provided a vital respite for bulls. Investors are now recalibrating their short-term strategies, anticipating that the Federal Reserve will prioritize avoiding deep damage to the labor market while continuing its fight against inflation in the long run.
