The odds clearly point to a rate cut: markets are pricing in an 87.2% chance of a drop to 3.50%-3.75%, while only 12.8% expect no change.
Source: CME FedWatch
But if the last two cuts If there were any guidance, traders should remain cautious. Prior to the September and October decisions, BTC saw small pre-FOMC rallies, a brief bounce after the announcement, and then a decline.
The setup looks the same this time.
Source: CryptoQuant
Currency reserves have fallen from around 2.95 million BTC in August to almost 2.76 million BTC now, so there is weaker demand in the spot market.
Source: Cryptoquant
Financing rates have also turned negative at times, with shaky leverage. Of key US data through Thursday, Volatility could hit before the Fed even says anything.
And that’s where the recent macro print became important. As Matt Mena, Crypto Research Strategist at 21Shares, told AMBCrypto:
“The data shows that inflation remains stable and not accelerating again – precisely against the backdrop that markets need to maintain confidence in further Fed easing.”
Here’s more…
The global liquidity of central banks has hardly moved as of 2022, it has been stuck between $28 trillion and $30 trillion. This is the same range that previously held Bitcoin in slow, sideways accumulation phases rather than breakout rallies.
Source: Alpharactal
Even the annual change in liquidity has something we already know: when it turns negative, those periods have been some of the best long-term accumulation zones for BTC.
Source: Alpharactal
But the most surprising development is happening entirely outside the US.
Source: Alpharactal
Of the major central banks, the Reserve Bank of India now shows the strongest correlation with the price of Bitcoin. BTC responds to global liquidity shifts, and not just the Fed.
This is countering the flow of sidelined capital. As Mena noted,
“With more than $10 trillion parked in money market funds and fixed income ETFs, declining yields make these vehicles structurally less attractive and increase the likelihood of a rotation into risky assets – historically a powerful tailwind for Bitcoin.”
And this is where everything connects
The hash ribbon has has now turned bearish. This happens when miners’ incomes decline and weaker operators begin to shut down their facilities.
At the same time, Short-Term Holder NUPL has also entered negative territory, highlighting capitulation among recent buyers.
Source:
In the last chart, STH-NUPL fell from about +0.05 in September to about -0.15 in November. This is one of the sharpest declines since 2022.
This combination of miner stress and short-term panic tends to cluster around key Bitcoin bottoms, even if short-term price volatility persists.
Final thoughts
- Bitcoin enters FOMC week with miner stress, weak liquidity and a rare new correlation.
- A clean recapture of key levels could depend on how markets digest easing expectations and whether capital finally comes to the fore.