Bitcoin (BTC) Price: Rebounds 6% as Fed Cut Odds Double Overnight – Is The Bottom In?

TLDR

• The odds of a Federal Reserve interest rate cut in December jumped to 69.40% on Friday, nearly double the 39.10% odds recorded just one day earlier on Thursday.
• Bitcoin is trading at around $85,071, down 10.11% over the past seven days, as traders watch for signs of a price bottom.
• Spot Bitcoin ETFs are experiencing their worst month of outflows since launching in January, with BlackRock’s IBIT seeing roughly $2.47 billion in redemptions.
• New York Fed president John Williams stated the Fed can cut rates “in the near term” without endangering inflation goals, contributing to increased rate cut expectations.
• On-chain data from Nansen shows mixed investor behavior with some wallets accumulating tokens while others rotate into stablecoins, suggesting repositioning rather than panic selling.

Bitcoin is trading at approximately $85,071 as market participants watch Federal Reserve policy signals closely. The cryptocurrency has dropped 10.11% over the past seven days according to CoinMarketCap data.

The odds of a December interest rate cut by the Federal Reserve nearly doubled on Friday. The CME FedWatch Tool showed rate cut probability climbing to 69.40% from just 39.10% the previous day.

New York Fed president John Williams made dovish comments that contributed to the shift in expectations. Williams said the Fed can cut rates “in the near term” without endangering its inflation goal. Bloomberg analyst Joe Weisenthal attributed the odds increase largely to these remarks.

The 30.30% jump in rate cut probability caught the attention of crypto traders. Some are speculating this could help Bitcoin find a price bottom. Crypto analyst Moritz posted on X asking if the rate shift would be “enough to find a bottom here for now.”

Lower interest rates typically benefit cryptocurrencies and other risk assets. When the Fed cuts rates, traditional investments like bonds and term deposits become less attractive to investors.

However, economist Mohamed El-Erian warned market participants not to get “carried away” by the comments. The Crypto Fear & Greed Index posted an “Extreme Fear” score of 14 in its Friday update.

Bitcoin ETF Outflows Hit Record Levels

Spot Bitcoin ETFs are heading toward their worst month of net outflows since launching in January. BlackRock’s IBIT has seen roughly $2.47 billion in redemptions this month alone.

The heavy outflows have sparked debate about whether demand for Bitcoin ETF products is weakening. Some market observers claim the ETF bid has “dried up” as prices decline.

Nicolai Søndergaard, a research analyst at Nansen, offers a different view. He says the outflows reflect normal bear market psychology rather than a collapse in investor appetite.

Mixed Signals From On-Chain Data

On-chain data from Nansen shows varied investor behavior during the current downturn. Some top profit-and-loss wallets continue to accumulate tokens, indicating conviction among certain traders.

Other smart-money addresses have moved into stablecoins. This rotation is common during uncertain market periods as investors seek to earn yield while waiting for clarity.

The analyst said ETF flows will depend on broader macroeconomic factors and policy decisions. A shift in market conditions could bring flows back into positive territory.

Coinbase Institutional believes rate cut odds are “actually mispriced” by markets. The firm points to tariff research, private market data, and real-time inflation indicators as evidence.

Since the October FOMC meeting, futures have shifted from expecting a 25 basis point cut to favoring no change. Rising inflation concerns drove the shift in expectations.

Coinbase Institutional noted that studies show tariff hikes can lower inflation and increase unemployment in short-term periods.

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