QCP Capital: The Federal Reserve may decide to lower interest rates by 25 basis points tonight, which could lead to large-scale liquidation
On December 18, QCP Capital announced on its official Telegram channel: The last Federal Reserve meeting of 2024 will be held tonight. Despite the strong festive atmosphere of Christmas, we see few reasons to celebrate. It is expected that the Fed will cut interest rates by 25 basis points at this meeting and release the final dot plot of this year.
We expect tonight's statement and dot plot to carry a slightly hawkish tone, reflecting US inflation stabilizing above the Fed's target of 2% and a robust labor market. The statement is expected not to commit to a path for rate cuts in 2025, emphasizing difficulties in accelerating rate cuts. Meanwhile, the dot plot is expected to convey three rate cuts in 2025.
Although we do not think that the Fed meeting will have much impact, liquidity across all markets has gradually decreased. This could lead to price volatility and potentially trigger large-scale liquidations.
The technical outlook for BTC also remains cautious as it formed an evening star pattern on daily time frame showing bearish divergence. If there are declines, don't be forced into liquidating positions. With hopes for 2025 becoming a potential bull market year for cryptocurrencies especially under Trump administration maintaining status quo might bring benefits.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.