K33 Research: This week's FOMC meeting is expected to increase market volatility, laying the foundation for Bitcoin's rise in the following weeks

Bitcoin took a breather after breaking above $108,000 for the first time, as traders awaited expectations of a rate cut from the Federal Reserve and gauged bullish sentiment from President-elect Trump’s support for cryptocurrencies. Bitcoin hit $108,315 on Tuesday before retreating to around $106,000. The total cryptocurrency market cap is approaching $4 trillion during this rally, according to CoinGecko data. The Fed is widely expected to cut interest rates by another 25 basis points on Wednesday, but the outlook for Fed policy is unclear due to strong U.S. economic growth and inflation risks from the president-elect’s broader agenda. “We expect this week’s FOMC meeting to heighten market volatility,” K33 Research analysts Vetle Lunde and David Zimmerman wrote in a note. “The macroeconomic calm that will follow the FOMC meeting could set the stage for Bitcoin to realize further momentum into the holiday season.” Bitcoin has risen more than 55% since Trump won the presidential election on Nov. 5. The highest concentration of open interest in bullish bets on Deribit is at the $120,000 strike price. Tony Sycamore, market analyst at IG Australia Pty, said there was reason to "be cautious chasing higher" at current levels. (Bloomberg)