The Federal Reserve hiked rates by 25 basis points, and Bitcoin didn’t see a major drop because the September hike was no longer a secret.
Next, watch three confirmation signals:
1. Whether Bitcoin ETFs have resumed net inflows?
2. Whether 10-year Treasury yields can fall?
3. Whether the total supply of stablecoins is expanding again?
If ETF buying remains steady, long-term bond yields top out, and on-chain dollars increase, then expectations for a December hike may not necessarily crush the market;
If all three deteriorate at the same time, a seemingly calm decision could just mean that the pressure hasn’t been fully transmitted yet.
There are roughly three scenarios for subsequent market action:
1. “Hike one more time, and the economy doesn’t fall into recession.” Bitcoin may stay range-bound, and capital will continue to concentrate in leading assets;
2. “Inflation cools and the Fed pauses its hikes.” A decline in long-term bond yields will provide an opportunity for risk assets to recover;
3. “Inflation doesn’t fall and growth weakens,” i.e., stagflation pressures rise. This is the least friendly to the crypto market, because interest rates can’t easily come down, while corporate earnings and risk appetite both worsen.
For the crypto market, the real risk isn’t how much it drops on a given night, but whether liquidity is truly released over the coming months.
Next, watch three confirmation signals:
1. Whether Bitcoin ETFs have resumed net inflows?
2. Whether 10-year Treasury yields can fall?
3. Whether the total supply of stablecoins is expanding again?
If ETF buying remains steady, long-term bond yields top out, and on-chain dollars increase, then expectations for a December hike may not necessarily crush the market;
If all three deteriorate at the same time, a seemingly calm decision could just mean that the pressure hasn’t been fully transmitted yet.
There are roughly three scenarios for subsequent market action:
1. “Hike one more time, and the economy doesn’t fall into recession.” Bitcoin may stay range-bound, and capital will continue to concentrate in leading assets;
2. “Inflation cools and the Fed pauses its hikes.” A decline in long-term bond yields will provide an opportunity for risk assets to recover;
3. “Inflation doesn’t fall and growth weakens,” i.e., stagflation pressures rise. This is the least friendly to the crypto market, because interest rates can’t easily come down, while corporate earnings and risk appetite both worsen.
For the crypto market, the real risk isn’t how much it drops on a given night, but whether liquidity is truly released over the coming months.