Bitcoin reverses and recovers slightly after sudden plunge

Bitcoin has recorded a slight recovery, after a strong sell-off last week that sent the value of this currency sliding to the threshold of 80,000 USD for 1 bitcoin.

This development somewhat eased concerns about a "nightmare" collapse in capital value that was engulfing the market, after the digital currency fell from its historic peak of $126,000 set in October.

Traders' attention is now focused on changes in US Federal Reserve (Fed) interest rate expectations.

Odds for a 25 basis point rate cut at the December meeting jumped to 70% as of November 23, up from just 39% a day earlier, according to the CME trading platform's FedWatch tool.

This change in sentiment comes from the latest statement from New York Fed President John Williams. Sharing with The Wall Street Journal, Mr. Williams commented that there is still room to adjust short-term interest rates to a more neutral level.

Mr. Williams stressed the need to bring inflation to the long-term target of 2% in a sustainable manner, but also to avoid causing unnecessary risks to the labor market.

The view reassured markets, which had been worried the Fed would keep interest rates unchanged following stronger-than-expected September jobs data and internal divisions revealed in minutes of its previous meeting.

Despite the complicated monetary policy landscape and a nearly 40% drop in just over a month, many experts remain optimistic about bitcoin's prospects.

Nicholas Roberts-Huntley, CEO of financial services firm Blueprint Finance, explained that the decline from October’s peak above $126,000 to below $90,000 reflected a convergence of a series of risk factors: news of tariffs, a stronger dollar and a wave of forced liquidations in an already overstretched market.

However, he asserted that the long-term fundamentals have not changed, saying that this correction helps remove excess leverage and create momentum for a healthier growth.

He predicts that bitcoin will stabilize and rise again in the $95,000-$110,000 price range by the end of the year. If macro conditions ease and money flows return, a strong rally in December is entirely possible.

In a more cautious view, Andreas Brekken, founder of trading platform SideShift.ai, believes that the bear market actually started in December 2024, but was obscured by the historic rise of the USD.

Given the current sell-off, he sees the next bull market starting in the first quarter of 2026.

Meanwhile, some observers are pinning their hopes on the Fed's expected end of its quantitative tightening program on December 1, which is designed to drain liquidity from the financial system.

Robert Le, head of research at Kiln, said the end of quantitative easing on December 1 could help reignite bitcoin's growth momentum as it looks toward 2026.

According to him, the peak set in the period of August-October may just be the midpoint of the cycle. The market may be mispricing both the growth potential and the downside risk of bitcoin in this period./.

(TTXVN/Vietnam+)

Source: https://www.vietnamplus.vn/bitcoin-dao-chieu-phuc-hoi-nhe-sau-cu-lao-doc-dot-ngot-post1078931.vnp