Bitcoin News Today: Bitcoin's $60K Fate Hinges on Fed's Diverging Policy Signals

Bitcoin's Price Volatility Tied to Fed Policy Uncertainty as CryptoQuant Flags $60K Risk

According to Bloomberg

Bitcoin's price swung between hope and despair last week as conflicting signals from Federal Reserve officials and shifting rate-cut expectations intensified market jitters. Blockchain analytics firm CryptoQuant warned that the cryptocurrency could slip below $60,000 by year-end if the Fed holds interest rates steady at its December meeting, a scenario now priced at roughly 40% by traders. The warning comes amid a 30% decline from Bitcoin's record high of $126,000 in early October, with the asset trading near $87,000 as of Nov. 21.

The Fed's policy uncertainty stems from diverging views among officials. New York Fed President John Williams sparked optimism by stating there was "room for a further adjustment" in rates, pushing December cut odds to 69% after his remarks. However, Dallas Fed President Lorie Logan urged caution, arguing that the central bank needs more data before easing policy. The divide reflects broader unease within the Federal Open Market Committee (FOMC), which faces a critical decision amid delayed economic data from the recent government shutdown. Key labor and inflation metrics, including October's jobs report, remain unreported, leaving policymakers with limited visibility.

Bitcoin's price reacted sharply to these mixed signals. After briefly bouncing above $84,000 following Williams' comments, the cryptocurrency faced renewed selling pressure as rate-cut expectations wavered. Analysts attributed the volatility to liquidity constraints and risk-off sentiment, with institutional investors pulling $3.5 billion from Bitcoin ETFs in November. "The market is over-relying on rate cuts," said Sara Devereux of Vanguard, noting that only one or two additional cuts might materialize in 2025.

CryptoQuant's analysis highlighted structural risks if the Fed pauses rate cuts. A stable rate environment could keep Bitcoin trapped between $60,000 and $80,000 through year-end, constrained by muted risk appetite and tight liquidity. The firm pointed to record stablecoin reserves of $72.2 billion on exchanges as a potential catalyst for a rebound, but stressed that macroeconomic clarity is needed to unlock this liquidity.

The broader market mirrored Bitcoin's turbulence. The S&P 500 faced a $2.7 trillion wipeout in early November, while Bitcoin's 10% overnight selloff triggered cascading losses in leveraged crypto derivatives. Derivatives markets showed signs of distress, with Bitcoin futures entering backwardation-a rare condition indicating extreme fear.

Despite the downturn, some analysts downplayed "crypto winter" fears. Bitwise's Matt Hougan argued that Bitcoin's long-term value lies in its utility, not short-term price swings, while others noted stronger institutional foundations compared to past cycles. Still, the absence of a clear Fed path left investors on edge.

With the December FOMC meeting approaching, all eyes are on whether the Fed will prioritize inflation control or signal a pivot toward easing. For Bitcoin, the outcome could determine whether it consolidates in a narrow range or stages a recovery fueled by renewed liquidity. As one trader put it: "The market is waiting for a green light-but the Fed's headlights are still off."