Key Factors Behind Today’s Surge in the Crypto Market

Article Rewritten:

Key Moment for Crypto Market as PCE Inflation Data is Anticipated

The crypto market finds itself at a critical juncture, with industry experts predicting a slight decline in the annual PCE inflation rate. The Personal Consumption Expenditures (PCE) inflation data for November is eagerly awaited by crypto enthusiasts and investors alike, as it holds significant implications for the digital currency market.

The Federal Reserve considers the Core PCE as its primary inflation indicator. Analysts anticipate a modest 0.2% increase in its monthly rate, while the annual rate is projected to drop to 3.3%, its lowest level since 2021.

Federal Reserve Chair Jerome Powell’s recent statements align with market expectations. Speculation is growing about the possibility of three rate cuts in 2024. According to CME FedWatch, there is a 45% chance of rate cuts commencing in March, with a 71% probability of a 25 basis points reduction.

In the midst of this economic landscape, major cryptocurrencies such as Bitcoin, Ethereum, Solana (SOL), BNB, XRP, Cardano (ADA), and Avalanche (AVAX) are demonstrating upward trends. This has sparked hopes of a traditional Santa Claus rally, where stocks tend to rise in December.

Despite the prevailing bullish sentiment, some caution is warranted. Bitcoin, the leading cryptocurrency, experienced a 1% increase in the past 24 hours, pushing its value to approximately $43,780. However, a significant 18% drop in trading volume suggests that traders are exercising prudence.

As the week draws to a close, attention is shifting to the expiration of crypto options on Friday. Notably, a substantial number of BTC and ETH options, valued at $1.11 billion and $490 million, respectively, are set to expire. This event could potentially trigger profit adjustments and subsequent price movements in the market.