Bitcoin Anticipates Recovery as December Federal Reserve Rate Cut Probabilities Increase: Analyst

Bitcoin traders exhibited a marked increase in optimism on Friday following a near doubling of the likelihood for a US Federal Reserve rate cut in December within a single day, bringing renewed hope to a market that has been declining for several weeks.

Key Takeaways:

• The probability of a Fed rate cut surged from 39% to 69%, igniting fresh optimism among Bitcoin traders.
• Experts suggest that a transition from tightening to easing could trigger a significant rebound in BTC.
• Some caution against overreacting, contending that the market may be overinterpreting a single dovish statement.

This change in expectations has already led to speculation that a shift in policy could assist Bitcoin in stabilizing after its recent decline.

Currently, Bitcoin is trading at approximately $85,071, having fallen more than 10% over the past week, as per CoinMarketCap.

Fed Cut Odds Rise Following Dovish Comments From NY Fed President

The impetus came from the CME FedWatch Tool, which indicated that the chances of a December rate cut rose to 69.40% on Friday, up from 39.10% just one day prior.

Analysts highlighted comments from New York Fed President John Williams, who indicated that the central bank could reduce rates “in the near term” without compromising its efforts against inflation, a statement that markets interpreted as notably dovish.

Bloomberg analyst Joe Weisenthal noted that Williams’ remarks were the main factor behind the “massive increase” in the odds, while sentiment on social media among Bitcoin enthusiasts quickly turned optimistic.

These comments from NY Fed President Williams have massively increased the odds of a December rate cut. https://t.co/JlCEUbnpA5 pic.twitter.com/Z5lXSglZVP

— Joe Weisenthal (@TheStalwart) November 21, 2025

Crypto analyst Moritz questioned whether the rise in rate-cut probabilities would finally enable Bitcoin to “find a bottom.” Others expressed a more bullish outlook.

Rate cuts generally drive investors toward assets like Bitcoin, as yields on conventional instruments decline. Several analysts indicated that the current macro environment favors a reversal.

Crypto commentator Jesse Eckel described the situation as “unfathomably bullish,” noting the economy’s shift from a tightening phase to an easing one.

“I’m unsure why we keep declining,” he remarked. Analyst Curb went further, forecasting that crypto “will explode in a massive rally.”

However, not all are persuaded. Veteran economist Mohamed El-Erian advised traders not to become “overly enthusiastic,” cautioning that markets might be placing too much significance on a single address.

The odds of a rate cut next month are now at 69.5%
It has almost doubled today after the NY Fed hinted towards a rate cut.
I still think that odds will go down as the Fed has no recent data to take a rate cut decision. pic.twitter.com/XTbBVhYQvs

— Ted (@TedPillows) November 21, 2025

Coinbase Claims Rate-Cut Bets Were “Mispriced”

In a note released on Friday, Coinbase Institutional contended that futures markets have been undervaluing the likelihood of a rate cut.

“We believe the odds for a rate cut are actually mispriced,” the firm stated, referencing new tariff research, private-sector data, and real-time inflation indicators.

Coinbase noted that traders shifted from anticipating a 25 basis point cut to expecting the Fed to maintain rates after inflation reports earlier this quarter raised concerns.

However, the firm pointed out that tariff impacts often decrease inflation and increase unemployment in the short term, effectively acting as a drag on demand and bolstering the argument for cuts.

As previously reported, Bitcoin may remain trapped between $60,000 and $80,000 through the end of December if the Federal Reserve opts to keep interest rates steady at next month’s FOMC meeting, according to new analysis from XWIN Research Japan.

Analysts suggest that a cautious Fed, still grappling with inflation near 3%, would likely uphold tight conditions, which historically exert significant pressure on equities and crypto.

If no cut materializes, XWIN anticipates the market will remain range-bound, with risk appetite subdued until macroeconomic clarity is restored.

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