Bitcoin Price Prediction as December Fed Rate Hike Odds Hit 99%

Bitcoin price remained under pressure on Nov. 7 after falling below its 200-day exponential moving average. BTC traded near $76,000 as investors assessed rising Federal Reserve rate-hike expectations and persistent exchange-traded fund withdrawals.

The cryptocurrency had retreated from its October high near $87,300, representing a decline of approximately 13%. The latest weakness followed stronger-than-expected U.S. employment figures and further institutional fund outflows.

Bitcoin Price Faces Rising Federal Reserve Rate-Hike Bets

Bitcoin price has dropped into a correction after falling by over 13% from its peak in October. This retreat has coincided with the ongoing expectations that the Federal Reserve will hike interest rates in the December meeting.

The probability of another Federal Reserve interest rate hike increased after the U.S. Bureau of Labor Statistics released its October employment report on Nov. 6.

According to the Bureau of Labor Statistics, the economy added 165,000 jobs in October. September’s employment gain was revised upward to 60,000 from the previously reported 29,000. The unemployment rate declined to 4.1% from 4.2% in September.

The stronger employment figures increased expectations that the Federal Reserve could raise borrowing costs again in December. However, the decision will also depend on inflation trends and other economic indicators.

According to Polymarket, as the chart below shows, odds that the Federal Reserve will hike interest rates jumped to 99% after the NFP data. Bitcoin and other risky assets tend to underperform the market whenever the Fed is either hiking rates or signaling that it will increase. 

Bitcoin ETF Outflows are Rising After Democratic Sweep

Bitcoin price is also falling as investors start selling their coins after the Democrats won the House of Representatives and the Senate. 

Data shows that spot Bitcoin ETF outflows jumped this week. Spot Bitcoin ETF outflows jumped by $411 million on Friday and $430 million the day earlier. These funds have now had $1.2 billion in outflows this month after shedding $515 million in October. Before that, the funds added $2.6 billion in September and $3.5 billion in October. 

There are a few concerns now that Democrats have control of the Senate and the House of Representatives. Senator Elizabeth Warren, a top critic of the crypto industry, will lead the powerful Senate Banking Committee. As such, there is a likelihood that she will investigate the industry.

Another risk is that the CLARITY Act will not pass the Senate and be signed into law by President Donald Trump. The CLARITY Act would have streamlined the industry by giving the CFTC more power to regulate it. It would have been the second landmark crypto bill after the GENIUS Act, which focused on stablecoins.

On the positive side, however, Bitcoin tends to ignore who is in the White House or controlling Congress. It jumped to several all-time highs when Joe Biden was in the White House. 

Bitcoin Price Prediction: Technical Analysis

The daily chart shows that the BTC price has slumped in the past few weeks. It has dropped from a high of $87,300 to the current $76,043. Most notably, the coin has dropped below the important 200-day Exponential Moving Average (EMA). Moving below that level is a sign that bears have prevailed.

Therefore, there is a risk that the coin will drop further in the near term. If this happens, the next important level to watch will be at $72,660, which aligns with the 50% Fibonacci Retracement level. A move above the 200 EMA will invalidate the bearish outlook.

This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry substantial risks, and technical projections do not guarantee future returns.