According to historical speculation, interest rate cuts are usually accompanied by a bull market after a big drop❗ Only one soft landing has been achieved since the 1980s. This happens when the job market is improving and unemployment is falling. This time the labor market is a little bit...
The U.S. central bank cut interest rates by 0.50% on September 18, its biggest surprise since 2008. It was the first rate cut since the COVID-19 crisis in March 2020. The Fed is trying to keep inflation moving toward its 2% target through regulation. However, the Fed acknowledged that the economic outlook is uncertain and will carefully evaluate the data received at its next meeting. (Setting the stage for market volatility)
Japan's inflation data for November has been released: After excluding fresh food prices, the inflation rate has remained unchanged at 3% for the second consecutive month. Therefore, a 25 basis point increase to 0.75% is almost a foregone conclusion in a few hours.
Many experts do not fully trust the latest CPI inflation report.
🔸The U.S. government has delayed the release of the inflation report for November, and the number is far below expectations.
🔸The overall inflation rate is 2.7%, and the core inflation rate is 2.6%, lower than the approximately 3% that many experts expected.
🔸The report was delayed due to the government shutdown and the cancellation of October data, so statistical agencies had to use estimated assumptions.
🔸The biggest issue lies in housing inflation, particularly the rent index, where in some areas, the rent index may be calculated as zero (compared to October and November), making inflation appear lower than it actually is.
🔸Many experts believe that as data returns to normal, inflation may rise again in the coming months.
The core CPI has currently fallen to its lowest point since 2021, having previously been significantly below expectations.
As a result, coupled with a sharp decline in the US dollar and bond yields, risk assets like $BTC are on the rise.
The annualized CPI for three months is currently slightly above 2%. The Federal Reserve will likely welcome this data. The market is expected to further digest interest rate cut expectations based on this data.
Bitcoin surged to about $90,087 approximately 8 hours ago, then quickly fell back to its current market value of about $86,580. The continuously rising positive funding rate on exchanges indicates an increase in leveraged long positions, which historically often leads to severe liquidations and higher volatility, including the recent peak and pullback.
Ethereum's trend is the opposite, with current short positions exceeding long positions, indicating weaker bullish sentiment, and the risk dynamics are also lower than $BTC. However, the movements of all assets will still align with Bitcoin, meaning that Bitcoin's funding rate must remain neutral or turn negative to ensure its price returns to $100,000 and allows other cryptocurrencies to rebound.
$BTC The futures open interest at the Chicago Mercantile Exchange for the entire year of 2025 is approximately half of its peak.
Since the sell-off on October 10 and the subsequent price movements, the market has closed a large number of leveraged and open contracts denominated in US dollars.
The most important thing now is for spot and ETFs to ultimately find the right balance point, allowing the market to regain its footing. The market is still far from overheating. Therefore, even if we see some relief in the first quarter, there is still significant room for recovery.
Bitwise's top 10 cryptocurrency predictions for 2026, do you think they will be accurate?
🔸 Prediction 1: Bitcoin will break the 4-year cycle and set a new historical high. The historical trend of Bitcoin typically follows a four-year cycle, but this view holds that the diminishing halving effect, expected lower interest rates, improved leverage control, and increasingly clear regulatory frameworks will break this cycle. After the ETF spot trading, institutional capital inflow has accelerated, and combined with a more favorable policy environment, it is expected that Bitcoin will set a new historical high in 2026. 🔸 Prediction 2: Bitcoin's volatility will be lower than that of Nvidia stocks. Bitcoin is currently still considered a highly volatile asset, but in reality, its volatility in 2025 will be lower than that of Nvidia stocks. In the long term, driven by institutional capital and ETFs, Bitcoin's volatility has steadily decreased over the past decade, and this trend is expected to continue in 2026.
It is expected that President Trump will interview Federal Reserve Board member Christopher Waller tomorrow for the position of Chairman of the Federal Reserve.
🔸Christopher Waller believes that cryptocurrencies are an inevitable part of the future financial system. He supports the Federal Reserve integrating stablecoins into the payment system in a controlled and pragmatic manner, rather than banning them.
🔸Regarding monetary policy, he tends to lower interest rates to support economic growth during an economic downturn.