Bitcoin Doji Candlestick Emergence and Market Reaction to Fed Rate Cut

- Bitcoin Price Decline Due to Doji Candle Appearance - Fed Rate Cut Announcement, Market Reaction in Focus [Unblock Media] Bitcoin's price has shown a downtrend following the appearance of a Doji candle. On Tuesday, Bitcoin hit an all-time high of $108,000 but failed to maintain its upward momentum and ended the day flat. On Wednesday, the Federal Reserve is expected to announce a rate cut, which is anticipated to signal slow easing next year. As a result, traders are reportedly engaging in de-risking for risk management. Currently, Bitcoin (BTC) is trading around $103,750, which represents a 2% drop over the day. This decline seems to stem from a pattern where a Doji candle at the peak indicates uncertainty and potential buyer fatigue. The downturn in Bitcoin has led to larger losses in altcoins. According to CryptoSlate, Solana and XRP have fallen by 3.5% and 2.8% respectively, showing greater market sensitivity. The Federal Reserve’s rate decision and economic outlook are scheduled to be announced at 2:00 PM ET on Wednesday. According to Bloomberg, this announcement will be a key variable for the liquidity and investment direction of the cryptocurrency market. Forbes noted that hawkish expectations from the Fed could trigger risk-averse sentiments, leading traders to trim their cryptocurrency positions. Hawkish expectations imply an environment where the central bank is anticipated to adopt a tight monetary policy. Most predictions suggest that the Fed will cut rates by 25 basis points (bp), bringing the rate to a range of 4.25% to 4.5%. This would mean a total easing of 100 basis points since September. However, the dot plot is likely to indicate fewer rate cuts next year. Analysts at ING mentioned in a memo to clients, "There are slightly stronger risks for short-term growth and the threat of higher inflation. We expect the Fed to signal only three rate cuts in 2025, down from the previously proposed four." They added, "We anticipate a rate cut of 25 bp per quarter in 2025, and we expect a final rate of around 3.75% by the third quarter." Such hawkish expectations seem to fuel de-risking, driven by a desire for correction in the Bitcoin market, which has surged from $70,000 to beyond $100,000 in the past two months. However, a reduction in the number of rate cuts does not necessarily mean tightening. Easing remains on the table, indicating that the path of resistance for risky assets is still tilted upwards.