November may not deliver the historically strong price gains for Bitcoin that investors have come to expect. Current market analysis suggests the cryptocurrency could instead experience a period of sideways trading.
Bitfinex analysts noted in a markets report that the current macroeconomic environment, characterized by easing policy but mixed signals from the Federal Reserve, supports a consolidation phase. This stabilization is seen as necessary before any significant expansion in volatility can occur.
The analysts highlighted that Federal Reserve Chair Jerome Powell has indicated uncertainty regarding the possibility of another 25-basis-point rate cut at the upcoming December meeting.
Fed Rate Cut Odds Diminish
The probability of further Fed rate cuts has seen a notable decline. In recent months, odds for rate cuts have consistently been around 90% or higher. However, the market currently assigns only a 67.9% chance of another cut at the Fed's December 10 meeting, according to data from the CME FedWatch Tool.
Typically, Fed rate cuts and the anticipation of further reductions are considered bullish for the cryptocurrency market. This is because investors often move capital away from perceived safer assets, such as term deposits and bonds, in search of higher returns in riskier investments like cryptocurrencies.
Conversely, widespread expectations of continued Fed rate cuts mean that any indication of the Fed pausing its easing cycle or reversing its course could significantly unsettle crypto market participants.
Bitfinex analysts have expressed concerns that Bitcoin (BTC) optimists may be losing patience if the price fails to reclaim the $116,000 level. They observed signs of waning conviction, evidenced by the continued presence of sellers among long-term holders.
"Unless the price recovers decisively above this range, time becomes a growing headwind for bulls."
At the time of publication, Bitcoin is trading at $103,000, marking a decrease of nearly 3% in the last 24 hours, according to CoinMarketCap.
However, not all market observers are predicting a period of subdued price action. November has historically been a strong month for Bitcoin's price appreciation.
November: A Historically Strong Month for Bitcoin
Data compiled by CoinGlass reveals that since 2013, Bitcoin has historically averaged a gain of 41.78% during the month of November. This historical trend leads some analysts to believe that past performance may be indicative of future results.
Crypto trader Dave Weisberger stated that Bitcoin's "fundamentals are strong."
He further elaborated, "Context is VERY constructive relative to previous cycles and we are at the BOTTOM, not the top of the range, relative to other financial assets."
Crypto analyst Carl Runefelt shared his outlook in an X post on Tuesday, predicting that "November will turn green again for Bitcoin soon."
He added, "Those big green candles are coming." Similarly, crypto trader AshCrypto expressed that he is "still bullish."
Despite these optimistic views, Bitcoin has struggled to regain its previous momentum after reaching new all-time highs of $125,100 in early October. This was followed by a market crash on October 10 that reportedly eliminated approximately $19 billion in leveraged positions from the cryptocurrency market.