Fed Cuts Rates Amidst Stable Bitcoin and Anticipation of Bank of Japan Policy Move
The Federal Reserve cut interest rates by 25 basis points, prompting little volatility in the markets. Bitcoin maintained its trading above $91,000, moving within a narrow range of $91,000 to $92,000, while Ethereum remained near $3,270 without clear breakout catalysts.
Market focus has shifted towards Tokyo as the Bank of Japan is expected to raise rates by 25 basis points at its meeting on December 19. Local Japanese markets showed mixed activity, with the Nikkei 225 initially moving higher after the Fed cut but ultimately slipping 0.11%, amid concerns over rising long-end Japanese Government Bond yields and discomfort with the pace of policy adjustments that may influence global risk appetite.
CryptoQuant data highlighted that exchange inflows have decreased since November, reflecting a pullback from whale investors which has reduced near-term selling pressure. Whales experienced significant losses, over $600 million, when Bitcoin fell below $100,000, contributing to about $3.2 billion in cumulative losses. Short-term holders have been selling at negative profits since mid-November, indicating a potential exhaustion of selling pressure in the crypto markets.
Despite modest improvements in ETF inflows, derivatives positioning remains cautious. In commodity markets, gold prices rose following the Fed's rate cut, while silver reached a record high driven by strong industrial demand and tight supply.
