What is the reason behind today’s surge in the Crypto Market?

Bitcoin and other cryptocurrencies experienced a surge in the market as investors eagerly awaited the release of the US PCE inflation data for November. This data, which is set to be unveiled by the United States Bureau of Economic Analysis, is seen as a crucial factor in determining the direction of the crypto market.

Investors are expecting a decrease in the annual PCE inflation rate from 3% to 2.8%, and they are particularly interested in the monthly rate, which is anticipated to remain stable. The Core PCE, which is considered the Federal Reserve’s preferred inflation gauge, is projected to increase by 0.2% on a monthly basis. However, the annual rate is predicted to dip to 3.3%, reaching its lowest level since 2021.

Market sentiment aligns with recent statements from Fed Chair Jerome Powell, who has projected three rate cuts in 2024. According to the CME FedWatch, there is a 45% chance of the Fed initiating rate cuts in March, with a 71% probability of a 25 basis point rate cut.

In the midst of these developments, Bitcoin and major cryptocurrencies like Ethereum, Solana (SOL), BNB, XRP, Cardano (ADA), and Avalanche (AVAX) are experiencing a festive rally in the crypto market. There is a palpable sense of anticipation for a Santa Claus rally, as these digital assets show upward momentum.

Bitcoin is currently priced at around $43,780, representing a 1% increase over the past 24 hours. However, a simultaneous 18% drop in trading volume suggests a cautious approach from the market.

As the options expiry date of Friday approaches, with 25,000 BTC options and 217,000 ETH options set to expire, worth $1.11 billion and $490 million respectively, the market is preparing for potential profit booking and the associated price fluctuations.