Bitcoin traders posted noticeably more optimistic commentary on Friday after the likelihood of a US Federal Reserve rate cut in December surged sharply within a 24-hour period.
The CME FedWatch Tool showed the probability of a rate cut rising to 69.40% on Friday, up from 39.10% the previous day.
Some analysts argue the shift could provide the catalyst needed to stabilize Bitcoin’s recent price decline.
Crypto analyst Moritz wrote, “Let’s see if that’s enough to find a bottom here for now,” as Bitcoin traded near $85,071 and remained down roughly 10% over the past week.
Dovish Fed Commentary Sparks Market Reaction
The rise in rate-cut expectations followed comments from New York Federal Reserve president John Williams, who said the central bank could lower rates “in the near term” without jeopardizing inflation progress.
Bloomberg analyst Joe Weisenthal pointed to the remarks as the cause for the surge in futures pricing.
Not everyone is convinced the shift will lead to immediate relief.
Economist Mohamed El-Erian warned that investors should not get “carried away,” but broader sentiment across the crypto market leaned bullish.
Crypto commentator Mister Crypto summarized the mood by noting, “Usually this would be bullish.”
Analysts Highlight a Potentially “Bullish Setup”
Crypto analyst Jesse Eckel described the backdrop as highly favorable, saying, “If you zoom out, the setup is unfathomably bullish.”
Eckel added, “I don’t know why we keep going lower,” arguing that markets appear to be moving from a tightening cycle to an easing one.
Another analyst, Curb, said, “Crypto will explode in a massive rally,” if cuts arrive as many traders now expect.
Rate cuts historically benefit higher-risk assets such as cryptocurrencies by reducing the yield advantage of traditional savings vehicles.
Coinbase Institutional Says Odds Were Previously Mispriced
Coinbase Institutional also weighed in, saying in an X post that markets have been underestimating the probability of a cut.
“While markets are leaning toward ‘no cut’ this time, we believe the odds for a rate cut are actually mispriced,” the firm said.
The post noted that inflation signals and tariff-related economic research support a case for reducing rates sooner than expected.
Despite the boost in sentiment, the broader crypto market continues to show weakness.
The Crypto Fear & Greed Index fell to an “Extreme Fear” score of 14 on Friday, marking one of its lowest readings in recent weeks.
