KEYTAKEAWAYS
- Fed rate cut probability drops to 2.5% after CPI data
- Trump’s Bitcoin reserve odds fall to 12%
- $2.12B BTC options expiring, max pain at $98K
CONTENT
FED RATE CUT PROBABILITY DROPS TO 2.5% AFTER CPI DATA
According to CME’s “FedWatch” tool, market expectations for a Fed rate cut in March dropped sharply after the latest CPI data was released. The probability of a 25 basis point rate cut in March is now just 2.5%, while the chance of holding rates steady has risen to 97.5%.
Expectations for a rate cut in May have also declined. The probability of a total 50 basis point cut by May is now only 0.2%, while the chance of a 25 basis point cut is 11.7%. The likelihood of no rate cut at all stands at 88.1%.
ANALYSIS:
This data suggests that the market has largely accepted that the Fed is unlikely to cut rates in the short term. Fed officials have repeatedly emphasized that cutting rates too soon could pose risks if inflation does not show a sustained decline toward the 2% target. The resilience of CPI data has further delayed market expectations for a Fed policy shift.
TRUMP’S BITCOIN RESERVE ODDS FALL TO 12%
On February 13, data from Polymarket showed that the probability of Trump establishing a strategic Bitcoin reserve within his first 100 days as president has dropped significantly to 12%. This is a sharp decline from 48% on January 18.
ANALYSIS:
Earlier, market optimism had surged over the idea that a Trump administration might support Bitcoin as part of the national reserve. This was fueled by his pro-business stance, deregulation policies, and increasing support for crypto.
However, the recent decline in expectations suggests that investors are reassessing the actual feasibility of such a move. Concerns over Trump’s concrete policy plans or the realistic execution of pro-crypto measures may have contributed to this shift.
Despite the lower probability, crypto-related policies could still be a key topic in the 2024 U.S. presidential election. If Trump wins, the regulatory landscape for cryptocurrencies may undergo significant changes.
$2.12B BTC OPTIONS EXPIRING, MAX PAIN AT $98K
On February 13, Deribit reported that $2.12 billion worth of Bitcoin (BTC) options will expire on February 14. The Put/Call Ratio is currently 0.68, indicating a stronger bullish sentiment, and the Max Pain price is at $98,000. BTC is currently trading around $96,000.
ANALYSIS:
The Max Pain price refers to the level where options holders experience the most losses, meaning the market may naturally gravitate toward this price at expiration. Since BTC is currently below Max Pain, there could be some upward pressure in the short term as traders adjust their positions.
However, the Put/Call Ratio of 0.68 suggests that the market remains bullish overall. Price movements will still depend on factors such as market liquidity, macroeconomic trends, and other derivatives market dynamics.
With such a large volume of options expiring, BTC could see increased volatility. Traders should watch closely to see if BTC moves toward the Max Pain level or continues its current trend.
Also Read：
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CoinRank Crypto Digest: February 11, 2025
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