Yesterday, Bitcoin reached a new record high, peaking at $107,793. This rise in Bitcoin is mainly due to MicroStrategy's stock entering the Nasdaq 100 index, and their CEO Michael Saylor announced a significant increase in Bitcoin acquisition. MicroStrategy spent $1.5 billion yesterday to buy 15,350 BTC at an average price of $100,386.
This indicates that they believe $100,000 for Bitcoin is just the beginning, so they continue to make large purchases. However, in the short term, this increase in Bitcoin is primarily driven by MicroStrategy, and this momentum may not last long.
If there are no new buyers and FOMO sentiment emerges, the market will likely need to correct in the short term. Especially under the influence of the Federal Reserve’s interest rate meeting and the Christmas market, investors may have a risk-averse sentiment, and market liquidity may decrease.
Currently, it seems almost certain that the Federal Reserve will cut rates by 25 basis points again in December, but that doesn't mean the market will continue to rise after the rate cut. The subsequent rate cut expectations from the Federal Reserve for 2025 may lead the market to be less optimistic about future trends. The latest dot plot will also be released in December, and it is expected that the Federal Reserve may cut rates 2 to 4 more times in 2025.
In the upcoming speech by Powell, he may reveal a more cautious attitude towards rate cuts. Powell may begin to manage market expectations, preventing the market from becoming overly optimistic and FOMO-driven. He may state that the Federal Reserve will conduct rate cuts in a restricted manner in 2025, and it is even possible that there will not be a rate cut in January 2025. If Powell sends such signals, it may offset the positive impact of the 25 basis point rate cut in December and may even lead to further short-term bearishness.
Therefore, we need to closely monitor Powell's speech after the interest rate meeting, as it will directly influence short-term market sentiment and price trends.
