Fed Emergency Rate Cut Odds Drop: Can Liquidity Injection Lift It

Fed Emergency Rate Cut Odds At 44%, Will Liquidity Injection Boost It?

The talk of the day is Fed Emergency rate cut speculation, especially after the Fed emergency meeting held today between the federal reserve and wall street. But meanwhile traders got a huge shock when December rate cut odds dropped to 44%.

For now, the crypto market is locked in a battle between extreme fear and a massive, incoming wave of liquidity injection. Let’s explore what will happen next, and how it will affect the industry.

Fed Emergency Meeting Today: Liquidity Injection Lifeline

Despite the current fear, a potential charge is coming in the form of massive cash injections, which is why the Fed emergency meeting today is so crucial. 

According to the latest update from analyst oxNoble, the federal reserve held an immediate conference with major Wall Street players. 

They discussed:

• Rate cut discussion

• Ending QT (Quantitative Tightening)

• A massive crypto liquidity injection to support financial markets

• US Treasury Liquidity Injection: J.P. Morgan expects a nearly $300 billion in money flow by mid-December, with the Treasury set to start injecting funds within 2-3 days. 

Note: China bitcoin liquidity has already hit the industry. They injected ¥1.12 trillion this week.

This created excitement because such Fed rate cut news, and immediate discussions usually increase hope for easier monetary policy because the environment is brutal right now.

Rate Cut Odds Dropped To 44%: Volatility Continue or Hope Prevail?

The CME FedWatch Tool shows that the market is now divided. There is a 55.6% chance that the authority will keep monetary easing the same at 375–400 bps, and only a 44.4% chance of an interest easing.

The odds dropped because the market is very uncertain, and some important members gave hawkish signals, saying they are not sure about cutting rates too fast. 

Because of this, investors lost confidence and now believe that a Fed emergency rate cut may not happen soon. However, a dramatic shift is underway, one that could inject hope back into the market: the promise of global liquidity. If this happens then the market will rebound in such a manner that no one ever imagined.

Will Market Flip Before FOMC Meeting Date December 10 or Crash Deeper?

Currently as of November 15, the Crypto Fear and Greed Index is at Extreme Fear 10, and the last 24 hours saw $321.35 million in total liquidations, with 125,774 traders wiped out. 

Ethereum and Bitcoin prices are crashing all week, fueling this negative sentiment. This market chaos is the main reason why the Fed rate cut odds drop today. 

The $300 billion crypto liquidity injection is a strong factor that can push the monetary easing probability back up before the December FOMC meeting. If the odds increase, then effect on the crypto market will be massive:

1. Bitcoin is trading at $95,840.6 right now, and with a positive FOMC news, it could move toward $120,000 – $135,000, even breaking its all-time high before 2025 ends.

2. Ethereum, at $3,173.17, could rise toward $5,000. This move is supported by the coming upgrade and federal reserve decision. Analyst Merilijn talked about the FUSAKA UPGRADE INCOMING on December 3rd, which pushed $ETH up by +58% when it happened earlier.

3. Fed emergency rate cut meeting could fuel Altseason , where many altcoins jump sharply.

Conclusion

The high volatility right now is happening because the market is trying to understand two opposite things at the same time: extreme fear on one side, and big monetary support on the other.

The investors are waiting for the US treasury liquidity injection to actually arrive and for clearer signals about what happened in the Fed emergency rate cut meeting today. Until it's clear, this fear sentiment will probably continue for the next few days. 

Disclaimer: This article is for information purposes only, and should not be taken as finance advice. Please DYOR before investing in cryptocurrency.