Bitcoin Eyes Increased Capital Inflow with Potential Fed Rate Pause

Bitcoin may see increased capital inflow if the Federal Reserve pauses interest rates at its December meeting. Such a pause could lead to more capital flowing into risk assets like Bitcoin.

Bitcoin's momentum has been boosted by the anticipation of an upcoming Fed rate pause, supported by CME FedWatch's 97% probability of a rate pause in December. However, analysts caution that while a rate pause may boost Bitcoin in the short term, the long-term impact will depend on various economic factors and the direction of monetary policy.

Investors are eagerly awaiting the next Federal Reserve rate announcement, paying close attention to Fed Chair Jerome Powell's post-announcement press conference for signals about possible rate cuts in 2024. market signals already indicate expectations of rate cuts starting in May 2024. This shift in monetary policy could create a more favorable environment for investing in high-risk assets like cryptocurrencies. The PCE is expected to have a significant impact on the market sentiment today as everyone waits for Powell's speech tomorrow.

Bitcoin is continuing to hover around the $38,000 level and is currently seeking further direction in an environment marked by continuing uncertainty, forming a price range between $38,000 and 35,500.