Bitcoin at US$ 92,000: Traders assess the probability of a US rate cut

Source: PortaldoBitcoin Original Title: Bitcoin today: BTC rises to US$ 92,000 and traders assess chances of interest rate cuts in the US Original Link: Bitcoin’s stable performance and limited volatility suggest that investors may be overlooking changing expectations for the Federal Reserve, which could lead to underpricing of the asset ahead of key inflation data releases, according to analysts.

Market complacency is the core argument.

“I believe the risk associated with tomorrow’s CPI release is slightly asymmetric, considering that the market expects about a 60% chance that Powell will not cut rates,” wrote Quinn Thompson, Chief Investment Officer at Lekker Capital, on Monday (12th).

He argues that the probability of only one rate cut before the midterm elections is about 75%, which “seems too low,” especially considering that the new Fed member Stephen Miran, nominated by Trump, will influence monetary policy.

Bitcoin has increased by 1.9% over the past 24 hours, with a trading price of US$ 92,160 according to CoinGecko data. This major cryptocurrency has been confined within the US$ 90,000 to US$ 94,000 range for nearly two months.

Bitcoin Low Volatility

Bitcoin’s implied volatility index (a measure of expected price fluctuations) hovers around 43, at its lowest level in years, indicating traders do not anticipate any major catalysts, and the market’s pricing errors are similar to the mispricing of the probability of rate cuts.

“The market is underestimating the probability of a rate cut,” Sean Dawson, head of research at Derive, told analysts, reinforcing the argument of mispricing. The CME FedWatch tool shows only a 5% chance of a rate cut on January 28. “To me, the probability is at least 10%,” Dawson said.

He defends this with conflicting macroeconomic data: the US created only 50,000 jobs in December, the worst annual growth since 2003, and core inflation remains near 2.6%, above the Federal Reserve’s target. These data are distorted by tariffs and last year’s government shutdown, making today’s CPI a key catalyst.

This argument is amplified by unprecedented political pressure, especially the Department of Justice’s criminal proceedings against Federal Reserve Chair Jerome Powell.

“The charges against Powell indicate that Trump is willing to pursue any Fed members who disagree with his view on rate cuts,” said Derek Lim, head of research at crypto market maker Caladan. “The government trying to control the Fed is unprecedented.”

This scenario favors a stronger one-way movement. If inflation maintains the Fed’s hawkish stance, Bitcoin should continue to consolidate sideways. But more moderate readings could surprise the market and push prices higher, analysts say.