🔥December meets the market in a tense macro environment. On one hand - the expected easing of Fed policy, on the other - the risk of tightening from the Bank of Japan. This combination is likely to sharply increase the volatility of cryptocurrencies.
➖Fed: rate and liquidity
The probability of a 0.25% rate cut by the Fed in December exceeds 80%. The economy is slowing down: inflation is stabilizing, and consumer spending is growing weaker. At the same time, the Fed and the U.S. Treasury are already providing liquidity - repo operations have reached $13.5 billion, bond yields are decreasing.
This supports capital inflow into risk assets: approximately $740 million flowed into crypto funds over the week, open interest has increased, and stablecoin turnover is rising. CPI data on December 10 may strengthen this trend.
🔥Bank of Japan: the main risk
The market is pricing in nearly a 90% chance of an interest rate hike by the Bank of Japan on December 19. This is critical for global markets: rising rates undermine the yen carry trade, which has financed risky assets, including crypto, for decades.
This factor has previously led to sharp declines $BTC - an example was the drop from 70,000 to 49,000 dollars last year.
🔥Exchange flows and tension
On exchanges, activity from large wallets is increasing, inflows $BTC are approaching high values for the year, and the volume of transactions with stablecoins has sharply increased. This indicates the market's preparation for a strong movement in the near future.
💥Key levels for $BTC
Strategic zone
supports: 80,000
Holding 90,000 can open the way to 100,000. A breakout will increase pressure from large participants.
💥Result
The crypto market finds itself between two forces: liquidity from the USA supports growth, while Japan creates a risk of a sharp reversal. Decisions from the Fed, comments from Powell, and the Bank of Japan's policy will be decisive. The market is clearly preparing for a strong impulse in December.
