Coinbase Predicts Bitcoin Recovery This December | Fed Rate Cut Likelihood at 92%
Edited By
Olivia Chen
Coinbase's research team believes Bitcoin could bounce back in December due to improving macro conditions. With market sentiment still shaky, many investors remain cautious as December approaches.
Improving Conditions Raise Hope
Key indicators point to a potential shift in Bitcoin's trajectory. As of December 4, the likelihood of a Federal Reserve rate cut stands at 92%, a factor that historically supports risk assets like cryptocurrency. The expansion of global money supply is also being tracked, with Coinbase previously forecasting market weakness in November, followed by a possible December recovery.
Currently, Bitcoin is priced around $90k, down from nearly $100k last month. Despite this dip, analysts highlight that Bitcoin has successfully bounced off support near $80k, suggesting it has some strength.
"One wrong comment could derail things fast," an analyst remarked, referring to the anticipated comments from Fed Chair Jerome Powell during the upcoming rate decision conference.
The Wildcard: Powell's Remarks
Investors are bracing for Jerome Powell's stance on future monetary policy. Last month, Powell's hawkish comments contributed to a recent sell-off. If he expresses a similar tone this time around, it could cap any potential rally even amid the expected rate cuts.
Many people are echoing doubts as well. One noted, "Honestly, I don't trust any exchange's predictions anymore it took four more months for BTC to actually move last December."
Market Sentiments
Both institutional and retail investors appear hesitant to re-enter the market, keeping it in a state of limbo. Meanwhile, others react with skepticism towards Coinbase's predictions, with comments like:
"Great story. I’ll continue to DCA like a responsible adult."
"Let there be more fear!"
Despite the mixed views, there’s a hint of optimism. Speculation suggests Kevin Hassett might become the next Federal Reserve Chair, which some argue could boost cryptocurrency sentiment in the long run due to his more dovish stance.
Key Observations:
📈 92% chance of a Fed rate cut supports crypto market recovery
⚖️ Market sentiment remains fearful, with caution from both institutional and retail investors
💬 "This sets a dangerous precedent" - Community voice on exchanges' predictions
With the backdrop of improving macroeconomic conditions, the focus is on Powell's commentary next week. Can Bitcoin thrive despite market anxieties? Only time will tell.
Forecasting Bitcoin's Path Ahead
There’s a strong chance that Bitcoin could see modest gains this December, especially if the Federal Reserve indeed cuts rates by month’s end. Analysts estimate around a 70% likelihood that positive macro conditions will enable a rally, lifting Bitcoin above the $90k mark again. However, if Jerome Powell’s comments lean towards caution, the chances of a sharp rebound may dip to around 40%. Thus, the looming potential for volatility remains high, with people keeping an eye on both Powell’s remarks and overall investor confidence. Should institutional players decide to re-engage, we might see Bitcoin break through resistance levels more decisively.
A Parallel from Unexpected Quarters
Consider the tech boom of the late 1990s. Investors hesitated as stocks plunged, fueled by fears surrounding the dot-com bubble. Yet, a surprising number of companies emerged stronger post-crash, eventually reinventing themselves and contributing to the tech landscape we know today. Similarly, Bitcoin’s resilience in the face of skepticism might illustrate that even amid uncertainty, underlying strength can prevail. Just as those companies adapted and found new paths, Bitcoin may very well recover, led by shifts in economic policy and evolving investor sentiment.