CME FedWatch places the implied probability of a Fed rate hike at 100% for the December 9 meeting, based on the November 12 snapshot. This adds to the pressure on Bitcoin, and the market may well feel the full impact.
Bitcoin and the broader cryptocurrency market are not fixed in place and are strongly influenced by the performance of traditional markets and the global economy. A rate hike directly weighs on investors' appetite for riskier assets such as crypto.
Bitcoin has been falling sharply even without the added pressure from the Fed. The recent drop in the BTC price appears to be driven largely by insufficient compensation for risk: Bitcoin and crypto generally look less attractive than tech or AI stocks, which some investors see as a better way to gain exposure.
That is the bearish reading. Since FedWatch reflects futures pricing, the hike is already expected and is not guaranteed to become a fresh shock.
Bitcoin below $70,000?
Bitcoin is trading at $72,744, below all the moving averages shown on the daily chart. A drop below $70,000 should not necessarily trigger a substantial surge in selling pressure, given how stretched the decline already appears.
In this reading, the imbalance between inflows and outflows remains stark. The concern is that nearly every top-15 crypto asset is still in a prolonged downturn, facing persistent outflows driven by security concerns, weakening investor sentiment and a lack of meaningful recovery prospects.
This view draws on data from Coinglass, CryptoQuant and SosoValue, which track derivatives, on-chain activity and ETF flows respectively. The interpretation is that all three show outflows from digital assets alongside a growing supply of stablecoins.
A full-scale recovery in the cryptocurrency market would likely require new catalysts and use cases. A potential burst of the AI bubble, with substantial losses for the largest market players, could push some of them toward digital assets. Such a shift is possible, but it is by no means guaranteed.
Confirmation of a market recovery would only come if higher highs appear and institutional products such as ETFs continue to see steady inflows.
