Crypto Markets Surge on Growing Odds of a December Rate Cut

Markets in the cryptocurrency space have seen a sharp uptick as investors become increasingly confident that the Federal Reserve (the Fed) will cut interest rates in December. The odds of a rate cut have climbed to about 67%. The logic is straightforward: if the Fed lowers interest rates, the U.S. dollar typically weakens, risk appetite rises, and speculative assets like cryptocurrencies benefit. Indeed, Bitcoin surged back above $86,000, recovering from recent dips, amid this more bullish macro backdrop. Author: Palladium Team Published on: November 23, 2025

What’s driving the optimism

One driver of sentiment is commentary from analysts suggesting that despite internal divisions at the Fed, Chair Jerome Powell may still back a 25‑basis‑point cut.
Another factor: With relatively few major inflation reports left before the Fed’s meeting, markets are closely watching Powell’s tone and language for cues.
Meanwhile, Treasury officials have said that the U.S. economy is not facing a recession nor a renewed inflation surge — remarks that help assuage fears that a cut would destabilize things.

But there are warning signs

It’s important to note that the Fed is divided on this. Some policymakers favour cutting, others favour holding rates steady until more data comes in.
One crypto analyst argues that the Fed should actually raise rates by 50 basis points — pointing to inflation that has exceeded the 2% target for years and record highs in stocks and housing.
As such: while the odds of a cut are elevated, the decision is far from assured and the risk of a surprise “no‑cut” or a dovish tone misread remains.

Crypto price action & analyst views

As markets lean into the rate‑cut narrative:

Bitcoin climbed more than 8% from recent lows around $81,000, with renewed trading volume and interest across retail and institutional arms.
Technical analysts believe:
- If Bitcoin can hold above roughly $86,000, it may target $90,000 to $96,000.
- Probability of a 25‑bps cut jumped from ~21% to ~66% in just four days — a volatile swing in expectation.
But risk warnings abound: Analysts note that with a 6‑6 split among Fed officials, uncertainty is maximized — which means markets are also exposed to a false move.

What this means & how to think about it

For crypto: The current mood is favourable — the combination of easing expectation + high risk‑asset appetite = tailwind.
For traditional macro markets: A rate cut could signal that the Fed is shifting toward a more accommodative stance — which in turn might spur further investment into risk assets.
For risk management: Because the Fed’s stance is still unclear, the rally could be vulnerable if Powell or others deliver a “hawkish” message or if inflation datapoints surprise to the upside. Traders should monitor: inflation prints, Powell’s remarks, Fed communications.
For investors: Given the rally, some analysts believe crypto valuations are starting to reflect more “good news” than might materialize — so while upside remains, downside risk is elevated.

Bottom line