Fed Cuts Interest Rate, But Smaller Cuts Expected in 2025
The Federal Reserve lowered interest rates to 4.25%-4.50%, but signaled that fewer rate cuts would be made in 2025, particularly due to persistent inflation in housing costs. Chairman Jerome Powell emphasized caution going forward, drawing attention to the inflationary effects of President Donald Trump’s policies, such as tariffs and tax cuts. The Fed is projecting only two rate cuts through the end of 2025, a decrease from previous expectations; core inflation is expected to remain at 2.5%, above its 2% target. The move was met with opposition from Cleveland Fed President Beth Hammack, reflecting growing uncertainty about the economic outlook despite low unemployment and economic growth.
Bitcoin Drops Below $100,000 as Fed Chair Powell Remarks
Bitcoin fell 6% to $98,940 and fell below the $100,000 level following comments by U.S. Federal Reserve Chair Jerome Powell against creating a national Bitcoin reserve. Powell said the Fed was not legally allowed to hold Bitcoin and was not seeking a change in the law, dampening expectations for President Donald Trump’s strategic Bitcoin reserve plan. Most altcoins were also affected by the decline, with the GMCI 30 index losing 7.18%. Former BitMEX CEO Arthur Hayes warned investors that there could be a major crypto sell-off around Trump’s inauguration as the market realizes the gap between expectations and reality. In addition, US stock indexes fell by about 3% as Powell offered a hawkish outlook for 2025.
El Salvador’s IMF Agreement
El Salvador has agreed to scale back its Bitcoin efforts as part of a $1.4 billion loan agreement with the IMF. Under the agreement, private sector Bitcoin adoption will be voluntary and public sector involvement in crypto activities will be restricted. The government will also reduce its role in the Chivo wallet program. The agreement includes economic reforms to reduce debt and increase financial stability, and with additional funds the total package is expected to reach $3.5 billion. The IMF’s executive board will review the program in February if the reforms are implemented, which would be a significant shift in its strategy for Bitcoin to be accepted as legal tender in 2021.
US Sanctions North Korea’s Crypto Network
The US Treasury Department has imposed sanctions on a cryptocurrency laundering network used to finance the North Korean regime’s illicit activities. Two Chinese nationals and a UAE-based company have been accused of facilitating North Korea’s cyberattacks and money laundering activities. North Korean hacker groups, particularly the Lazarus Group, are said to be responsible for the theft of millions of dollars in crypto.
Deutsche Bank’s Ethereum L2 Attack
Deutsche Bank is developing a Layer 2 blockchain network running on Ethereum using ZKsync technology. This initiative, called “Project Dama 2,” aims to provide regulatory compliance and transaction efficiency for banks operating on public blockchains. The project aims to provide regulators with “super administrator rights” to monitor transaction activity, while also creating special lists of validators to enable banks to conduct secure transactions. The project, the first test version of which was launched in November, is being developed under the Project Guardian initiative of the Reserve Bank of Singapore and is planned to be launched in 2025.
Ohio Aims to Protect Against Inflation with Bitcoin Reserve
Ohio has introduced a bill that aims to create a Bitcoin reserve in order to protect public funds against the depreciation of the US dollar. House Bill 703, called the “Ohio Bitcoin Reserve Act” and proposed by Ohio Representative Derek Merrin, would authorize the state treasury to invest in Bitcoin. Merrin stated that this initiative would strengthen the state’s financial strategy and support the state’s investment portfolio thanks to Bitcoin’s store of value potential.
The bill aims to make Ohio one of the leading regions considering adopting Bitcoin as a state reserve. Andrew Burchwell, Executive Director of the Ohio Blockchain Council, emphasized that this move will increase commitment to innovative technologies and strengthen the state’s financial system.
Bitwise Launches Solana Staking ETP in Europe
Bitwise has launched its Solana staking ETP (BSOL) for the European market, offering staking rewards of up to 8% per annum. The move comes at a time when Solana ETF initiatives have stalled due to regulatory challenges in the U.S. Bitwise gained an easier entry into the market by acquiring a European ETP issuer in August, and aims to take advantage of more favorable regulations in Europe. BSOL provides a significant advantage over ETFs in the U.S., which cannot offer staking rewards due to existing regulatory restrictions. The launch of other Solana staking products in Europe, such as VanEck, is increasing competition in the region.
——————————————————————————————
BITCOIN (BTC)
BTC is priced at $ 101,608 as of the morning hours with a 0.86% gain in value. The price broke the important support levels of 104,088 and 102,626 during this decline, and these levels may work as resistance in the short term. If the price continues to stay below these levels, downward pressure can be expected to continue. The price is currently trading at a support point near the 100,643 level. If this level is broken, the price is expected to move towards lower support levels, and the first target is 98,257. In the event of a deeper correction, the 93,283 region stands out as a critical support level where buyers can re-enter the equation as a strong demand area. In case of an upward recovery, the price must first rise above 102.626. A permanent move above this level could allow the price to test 104.088 again and then return to the uptrend. However, if the price fails to break the resistance levels, the current downtrend may continue.
ETHEREUM (ETH)
ETH is priced at $ 3688 with a 1.12% gain as of the morning hours. During this decline, the price tested the critical support levels of 3,777 and 3,671 and is currently trying to hold on to this area. If the 3,671 support is lost, the downward movement can be expected to continue and the price’s next target will be 3,613. In a deeper correction, the support area at 3,443 stands out as an important area where buyers can step in. In the upward recovery scenario, the price must first surpass the 3,777 level again. If this level is maintained, the price can be expected to move back to the 3,829 level and then to the 4,040 level, which acts as resistance. However, it is critical for the price to show a sustained movement above the 3,829 level in order for the current selling pressure to ease.
RIPPLE (XRP)
XRP is priced at $ 2.34 with a 1.37% gain as of the morning hours. Closing yesterday with a 10% increase, XRP started the new day positively and is moving just below the resistance level. XRP, which experienced a rapid pullback to $ 2.17 levels in the morning hours, encountered rapid purchases. Breaking the $ 2.3645 level, which it tested many times during the day, will be important for the continuation of the positive trend. If it remains above this level, it can be expected that $ 2.4935 and then $ 2.6747 will act as resistance. In a possible negative trend, the 2.2305 – 2.16 band appears as a support zone. If it cannot hold on to these levels, a pullback to the 2.0740 level can be seen. Therefore, it is important for investors to carefully monitor the identified critical support and resistance levels.
AVALANCHE (AVAX)
AVAX is priced at $ 42.60 as of the morning hours with a 0.37% loss in value. Closing yesterday with a 10.73% decrease, AVAX started the new day with minor pullbacks. $ 42.50 appears to be a very critical support level for AVAX, which is moving in the support zone. If the possible positive trend continues, the $ 41.30 and $ 39.94 levels are in the support position. If it cannot hold on to these levels, a pullback to $38.27 may be seen. In a possible positive trend, it will be important to first break the middle band of the $43.26 support zone, then the upper level of the region, $44. Then, the $45.08 level can be met as resistance. It is important for investors to carefully monitor the identified critical support and resistance levels.
SOLANA (SOL)
SOL is priced at $209.20 as of the morning hours with a 1.33% increase in value. Closing yesterday with a 7.45% decrease, SOL started the new day positively. SOL, which hit the $200 levels during the night hours, seems to have exceeded the $205-208 resistance zone for now, encountering rapid purchases. If it stays above the $208 level, $214.72, then $218.75 and $222.35 levels can be met as resistance. If it cannot hold on to $208 and if it moves negatively, $206.88 and $205 levels can be expected to work as support. Below these levels, $200 can be met as a strong support level. It will be important for investors to carefully monitor the identified critical support and resistance levels.
