$JUV
The expectation for the Federal Reserve to cut interest rates has significantly cooled! The probability of a rate cut in January 2026 is less than 25%. Will the cryptocurrency market start with fluctuations next year?
CME's latest data is shocking: the probability of a 25 basis point rate cut by the Federal Reserve in January 2026 is only 24.4%, while the probability of keeping the interest rate unchanged is as high as 75.69%. The cumulative probability of rate cuts in March has not exceeded half. For the cryptocurrency market, which relies on liquidity, this is undoubtedly a cold shower.
In the short term, the continuation of high interest rates will pressure market liquidity, making it difficult for the cryptocurrency market to experience a one-sided bull market. Bitcoin, as digital gold, may be relatively resilient, but the lessons from previous rate cuts where it “spiked and then plummeted” and many suffered liquidation are still fresh. High-leverage operations are easily harvested by market fluctuations. Altcoins are in a worse situation, as funds will accelerate the withdrawal from air coins lacking fundamentals, and the differentiation of quality ecosystem coins and core assets will become increasingly obvious.
In the medium term, the 41.4% probability of a rate cut in March still holds hope. If subsequent inflation data improves, easing expectations may reignite. However, current institutional funds in the cryptocurrency market are more cautious, with ETF inflows slowing down. The market is likely to be in a phase of consolidation rather than a frenzied surge.
Do you think we can expect a rate cut from the Federal Reserve in March? Is now the time to buy core coins or hold and observe?