Bitcoin Approaches $100K as Fed Signals Potential Rate Cuts in 2025

Fed's Insights on Rate Cuts

Federal Reserve Governor Christopher Waller has hinted at multiple interest rate cuts in 2025, contingent on favorable inflation trends.

Bitcoin's Reaction to CPI Data

Following positive inflation data, Bitcoin has surged above $99K, with traders eagerly watching for a breakout past the $100K resistance level. This rally has also benefited altcoins, with Solana climbing 8% and XRP gaining 15%.

Key Highlights

• Waller remarked, "The inflation data we got yesterday was very good," indicating a cooling in price pressures.
• If inflation data remains favorable, rate cuts could occur in the first half of 2025, potentially as early as March.
• The two-year Treasury yield dropped to 4.25%, reflecting market adjustments to Waller's comments.
• Markets are currently projecting 40 basis points of rate cuts in 2025, an increase from earlier estimates of 34 basis points.
• Waller emphasized that the pace of cuts is data-dependent, warning that persistent inflation could lead to fewer cuts than anticipated.

Bitcoin's Market Activity

Bitcoin's price has fluctuated between $98,000 and $100,000 over the past 48 hours, wrestling with the psychological barrier of $100,000. After briefly dipping below $90,000, the positive inflation data has rekindled a bullish sentiment among traders.

Altcoin Performance

Despite Bitcoin's strong performance, its market dominance has slid to 57%. Meanwhile, alternative cryptocurrencies have seen substantial gains, showcasing the broader market's bullish outlook.

Broader Economic Context

The DXY index is on a downward trend, but many anticipate it will drop further once Donald Trump takes office, echoing patterns observed after his initial election victory in 2016.