Bitcoin 
$78,121 entered December with a notable drop, with many altcoins facing losses exceeding 10%. Last week’s market uptrend was fueled by expectations of an interest rate cut, but the monthly closing candle turned the tides for cryptocurrencies. The critical question now is: what are the current forecasts regarding interest rates?
Bank of America’s Predictions
BofA Global Research has recently shared its updated forecast for December’s interest rates and economic expectations. Following signals from Fed members last week, analysts suggested that the probability of a rate cut on December 10 has increased. They anticipate a positive end to the year with a 25-basis point cut.
Previously, the bank had not anticipated a December cut, but circumstances have changed. This development is generally favorable for cryptocurrencies; however, its effect on the charts has been limited. Analysts project two more rate cuts in 2026 but expect no changes until the June and July meetings.
“Our prediction for additional cuts next year is due to Powell’s expected departure, not our economic assessment.” – BofA Analysts
We may know the new Fed Chair before the year’s end. Hasset is the leading contender, followed by NY Fed President Williams, who boosted interest rate cut expectations with his dovish statements last Friday, supporting risk markets.
“If the Fed cuts rates next week, we believe it increases the risk of pushing the policy into a loose zone due to fiscal stimuli.” – BofA
Commentary on Cryptocurrencies
According to CME Group’s FedWatch tool, the market’s expectation for a rate cut is over 80%, virtually confirming the move ahead of the meeting. The Fed is not fond of surprises, and with recent poor employment figures and Williams’s statements, expectations have improved. Despite the Fed’s situation improving, risk appetite hasn’t recovered, leaving BTC resistance without the expected support and displaying distressingly red charts today.
In the coming days, incoming data and the December 10 decision, along with Powell‘s subsequent statements, will be crucial. Should he clearly state that rate cuts have ceased, it could dampen risk appetite until May. Conversely, dovish remarks from Powell may boost expectations for January.
