The US Federal Reserve (Fed) is expected to announce its interest rate decision at 3am (19th) tomorrow. The market generally expects the Fed to cut rates by another 25 basis points in December. According to the CME Fed Watch tool, the market expects a 95.4% chance of a 25 basis point rate cut in December, and only a 2% chance of keeping rates unchanged.


Traders are watching the expected Fed rate cut

Further reading: Fed's Mouthpiece: 97.1% Chance of 25bp Rate Cut in December! Rate Cuts May Be Put on Hold Next Year
Will BTC further rise after the Fed rate cut?
K33 Research analysts Vetle Lunde and David Zimmerman wrote in a report:
"We expect the upcoming FOMC meeting to increase market volatility. In the aftermath, the macroeconomic landscape will likely see a few calm weeks, which could further lay the groundwork for BTC's momentum during the Christmas holidays."
0x Research's analysis based on trading models yesterday showed that by January 20, 2025, when Trump takes office, BTC could surge to $120,000, with an 83.33% probability according to the model.
However, some analysts also emphasize that "chasing BTC needs to be cautious" at the current level, and an anonymous expert also told ABMedia that the current BTC price may have already priced in (i.e. the market has already anticipated and reflected the event or information in the price), because the market had generally expected a rate cut earlier. Under this premise, if the Fed cuts rates as expected tomorrow, the market's bullish sentiment may be exhausted and it will pull back, but it will be a relatively small correction.
However, there is an extremely small chance that the Fed may announce a pause in rate cuts, mainly because some Fed officials have mentioned the need to slow the pace of rate cuts, or even raise rates to curb inflation, but this view should be in the minority and unlikely to gain a majority vote. However, if this no-rate-cut scenario occurs, it could trigger a major market crash.