"After a recovery phase in mid-October, Bitcoin (BTCUSD) has retreated to around 106,000 USD, reflecting investors' cautious sentiment as fundamental factors have yet to provide a clear catalyst for the next directional move. Although the long-term outlook for Bitcoin remains positive, the short-term picture is being shaped by a mix of factors including prolonged monetary tightening, the strength of the U.S. dollar, and a slowdown in ETF inflows. The "higher for longer" monetary stance is one of the key factors restraining Bitcoin's short-term momentum."
"Following its late-October policy meeting, the Federal Reserve (Fed) cut interest rates by 25 basis points, but emphasized that this was not the beginning of a prolonged rate-cutting cycle. Comments from Chair Jerome Powell indicated that the Fed remains cautious, as core inflation still sits well above the 2% target. Market expectations for a rate cut in December have been nearly eliminated, with the U.S. 10-year Treasury yield holding around 4.1% and the U.S. Dollar Index (DXY) steady at 99.6, near a three-month high."
"However, in the medium term, this stance could lay the groundwork for a potential easing cycle in the first half of 2026, as signs of a slowdown in the U.S. economy emerge. According to the Atlanta Fed's GDPNow model, fourth-quarter 2025 growth is projected at 1.6%, down from 2.3% in the previous quarter. If this deceleration continues, the Fed is likely to shift from maintaining to easing policy, creating favourable conditions for capital to return to risk assets, including Bitcoin."
Bitcoin retreated to around 106,000 USD after a mid-October recovery, reflecting cautious investor sentiment as fundamentals lack a clear catalyst. Short-term momentum is constrained by prolonged monetary tightening, a strong U.S. dollar, and a slowdown in ETF inflows, while the long-term outlook remains positive. The Fed cut rates by 25 basis points in late October but signalled this was not the start of a sustained easing cycle, with core inflation still above the 2% target. Market expectations for a December cut were largely removed, with the U.S. 10-year yield near 4.1% and the DXY close to recent highs. A potential easing cycle in early 2026 could return capital to risk assets if U.S. growth decelerates, with Atlanta Fed GDPNow projecting Q4 2025 growth at 1.6%.
Read at London Business News | Londonlovesbusiness.com
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