📉 The decline in interest rate cut bets and pressure returns on crypto
After the release of strong U.S. GDP data yesterday, traders have reduced their expectations for an interest rate cut in January.
The probability of a cut has dropped to only 14.4%, compared to 85.6% for maintaining the rate, reflecting the strength of the U.S. economy with GDP growth at 4.3%, higher than expectations.
This development is important because the interest rate cut this year was the spark behind Bitcoin's rise to new peaks, while we are now witnessing liquidity pressure as the year ends.
The Fed seems to be in a wait-and-see mode, despite calls for an interest rate cut in 2026 to avoid a potential recession.
The market is now sensitive to any incoming data, and caution is required.
