There is an 89% chance the FED will cut rates, according to the CME Group.
A rate cut could boost BTC, but the specter of the bear market is lurking.
With 6 days to go until the Federal Reserve (FED) monetary policy meeting, derivatives and prediction markets are strongly discounting an interest rate cut, an event that has historically been favorable for the performance of bitcoin (BTC).
According to data of the CME Group, the odds of a 25 basis point cut reach 89%. While only 10.8% of the market expects the FED to maintain the current range of 3.75%-4% unchanged.
The scenario of an increase was practically ruled out by the operators. The figures show that the expectation of monetary easing largely dominates the narrative prior to the announcement.
The information matches what reflect prediction markets like Polymarket, where the 25 basis point reduction option concentrates 94% probability. The bet on a more aggressive movement, of 50 basis points or more, has lost strength.
This context comes as bitcoin continues to try to regain ground. The digital currency has oscillated around USD 93,000, after a drop that was accentuated in mid-November.
A rate cut usually puts downward pressure on the yield of Treasury bonds, a condition that has historically served as a catalyst for alternative assets such as bitcoin, as CriptoNoticias previously reported.
However, the specter of a bear market is lurking. This, considering that there are on-chain indicators in bearish territory.