Fed Week Puts Bitcoin and Stocks Under Pressure Ahead of $11 Billion Expiry
The Fed, PCE inflation, and the biggest Deribit expiry ever could determine the direction of BTC, stocks, and the dollar this week.
Key Takeaways
- The Fed meets on Wednesday, while the market is almost ruling out a rate hike this week.
- PCE inflation follows on Thursday and is expected to rise to 3.7% year over year.
- $10.97 billion worth of Bitcoin options expire on Friday, with the biggest concentration around $78,000.
A busy week for the Fed, inflation data, and a major Bitcoin options expiry could set the tone for stocks, the dollar, and BTC heading into the end of the year. Investors are mainly watching the Federal Reserve's rate meeting, Thursday's PCE inflation report, and the Bitcoin contracts expiring on Friday.
Fed Keeps the Market on Edge
The odds of a rate hike this week have fallen below 10%, according to CME FedWatch. A month ago, that chance was still 64.2%. Even so, almost nobody on Wall Street thinks the Fed is done hiking.
In September, the central bank raised rates for the first time since 2023. That put the policy rate between 3.75% and 4.00%. That matters for a lot more than just bonds. Higher rates make safer investments more attractive and can cool interest in riskier assets like stocks and crypto.
So the market is not just watching Wednesday's decision, but also the tone from Chair Kevin Warsh during the press conference later that day.
Inflation and Rate Expectations
On Thursday comes PCE inflation, the measure the Fed watches most closely. Economists expect it to rise 3.7% year over year, up from 3.4% in August. That is still well above the 2% target.
Broader rate expectations are still tense too. According to a Reuters poll, all of the under-100 economists surveyed expect a rate hike in December. CME FedWatch puts the odds at 68%. That shows the market is mostly waiting for fresh confirmation, not a quick pivot.
Timing also plays a role here. Yardeni Research pointed out that the Fed may be waiting because of the election calendar. That is not a new economic signal, but it is an extra factor the market is watching this week.
Why Bitcoin Is Extra Sensitive
This week is especially important for Bitcoin because the price is already below the early-October peak. BTC traded around $80,472 (€71,900) on Sunday, while earlier this month it moved above $86,000 (€76,800). On Friday, $10.97 billion worth of Bitcoin options expire on Deribit, the platform's biggest expiry so far.
That matters for European crypto readers because expiries like this often show where traders have built their positions. Calls outnumber puts by almost two to one, but the biggest concentration is around $78,000 (€69,700). That makes it clear how close the market still is to a turning point, especially with the Fed and other central banks also making decisions this week.
Europe and Japan add another layer. The European Central Bank meets on Thursday and the Bank of Japan on Friday. Together, those decisions make this one of the busiest weeks of the year for the crypto market.
The recent liquidation wave also shows how quickly the market can turn when macro pressure and leveraged positions rise at the same time.
