Bitcoin circled $76,000 on Nov. 8 as “high leverage liquidity” formed around the spot price.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin embraces Fed rate cut with trip toward $77K
Data from Cointelegraph Markets Pro and TradingView showed modest Bitcoin (BTC) price gains mostly holding after the daily close.
These came in a fashion similar to the previous day, with a sudden push during the Wall Street trading session seeing new all-time highs of just below $77,000 on Bitstamp.
The volatility came as the United States Federal Reserve lowered interest rates by an expected 0.25%.
After the latest Federal Open Market Committee (FOMC) meeting, Fed chair Jerome Powell said risk factors impacting its dual inflation and employment mandate were “roughly in balance.”
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low,” he said in prepared remarks.
“Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated.”
Fed target rate probabilities. Source: CME Group
As Cointelegraph reported, markets were in agreement over the Fed’s course of action. On Nov. 8, per data from CME Group’s FedWatch Tool, consensus favored a further 0.25% cut at the next FOMC meeting in mid-December.
Trading resource The Kobeissi Letter said that the Fed’s “pivot” on interest rates could still be at risk if longer-term inflation trends were to pick up.
“Ultimately, we expect to follow long-term inflation expectations which have not ticked higher yet,” it wrote in a dedicated thread on X.
“However, if these do begin rising, as they now stand at 2.1%, we believe the ‘Fed pivot’ would be at risk. This is a big IF, but anything is possible as we head into 2025.”
“High leverage liquidity” risks BTC price squeeze
Bitcoin showed little sign of concern over macroeconomic minutiae as it set a new all-time high and its highest-ever daily close.
Related: Bitcoin can go ‘parabolic’ with BTC price weekly close above $71.5K — Analysis
BTC/USD was up 8% month-to-date at the time of writing, with Q4 gains sitting at 19.6%, as calculated by monitoring resource CoinGlass.
BTC/USD monthly returns (screenshot). Source: CoinGlass
CoinGlass data also revealed liquidity building heavily on either side of the spot price on exchange order books.
“High leverage liquidity,” the platform responded on its X account, suggesting that not trading would be the “best strategy” in the current climate.
BTC liquidation heatmap (screenshot). Source: CoinGlass
“Expecting a little pump before this overheated market makes a correction,” trading account CryptoMutant predicted amid discussing the liquidity shifts.
“In case of correction, the 72,600 level must hold to keep the sentiments positive.”
BTC/USDT chart. Source: CryptoMutant/X
Fellow trader CrypNuevo saw the potential for a “long squeeze” — a cascade of long BTC liquidations — before the weekly close.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.