Bitcoin’s Big Comeback? Liquidity Shifts, but US Economy Could Still Be the Villain!

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Key takeaways:

  • The Federal Reserve might finally start loosening up a bit, but can it save Bitcoin from the abyss?

  • Fiscal woes and weak sectors are dragging the market down, but hey, at least there’s hope for crypto with easing tariffs and some targeted stimulus plans. Maybe.

Bitcoin (BTC) and the whole crypto circus could remain on shaky ground until the US Federal Reserve delivers its big decision on interest rates come Dec. 10. Spoiler alert: No one knows what’s going to happen. Will the Fed cut rates by 0.25%? Will it keep them steady at 4%? The tension is real. Experts are split. Inflation’s sticking around like that one relative who never leaves, while signs of economic slowdown are more visible than ever.

Traders are absolutely divided on this-some are betting on a 0.25% rate cut, while others are clinging to the hope of stability. Meanwhile, the cautious Fed members (who we suspect might just be hanging on to a good sweater) argue that President Trump’s tariffs have been a key inflation culprit. If anything, those tariffs have squeezed the room to ease rates and keep growth going. And yet, reports from BlackRock say the US job market is showing signs of cooling. And I mean, who didn’t see that one coming?

Is the Fed the Only One to Blame for Bitcoin’s Fall? Maybe Not…

Let’s not pretend the Fed’s all-powerful hand is the sole reason Bitcoin’s been on the struggle bus. Yes, concerns about inflation have been the Fed’s favorite topic for months. In fact, Fed Governor Christopher Waller recently voiced his concerns about how restrictive monetary policies are crushing lower- and middle-income families. As if they weren’t already struggling with student loans, mortgages, and avocado toast.

However, blaming Bitcoin’s lackluster performance solely on the Fed is a little like blaming your bad haircut on the weather. Sure, it’s easy to do, but there are more factors at play. Bitcoin’s downtrend has been hanging around since early October, long before the Fed started playing with rates. US tariffs managed to shrink the monthly deficit (yay for that, right?) while the Fed’s balance sheet continued its slow death. Meanwhile, the US dollar strengthened against other currencies, which usually means Bitcoin feels a little weaker. It’s the dollar’s inverse effect-basic economics 101.

Tracking the exact moment Bitcoin hit its downward spiral since its all-time high on October 6 is like trying to spot the exact second a pot of soup goes cold. It’s messy. The reality is that freight activity slowed, housing markets took a breather, and companies tightened their cash flows. So yeah, Bitcoin’s price drop is probably more about general market anxiety than the almighty dollar.

But fear not, dear crypto enthusiasts! The Fed’s decided it won’t let its $6.5 trillion balance sheet fall below its current level, and repo operations are on the horizon. The strategy here is simple: keep the cash flowing into markets, inject liquidity, and hope that we can all breathe a little easier.

Meanwhile, President Trump has ordered Treasury Secretary Scott Bessent (who we’re pretty sure moonlights as a DJ) to prepare a stimulus package for lower-income households. In theory, this will kick in early 2026. Also, some tariffs may be reduced to help lower inflation risks. Yet, things are expected to get even more interesting in 2026 when “The One Big Beautiful Bill Act” (or whatever it’s called) takes effect. Buckle up, folks.

Bitcoin Could Be on the Verge of a Major Rebound… If Liquidity Returns

By the start of next year, there should be a bit more clarity in the economic outlook-whether it’s good or bad is anyone’s guess. Right now, the real estate and auto sectors are looking pretty gloomy, putting a lot of pressure on regional banks. Bitcoin and other risky assets have been trying to play it safe, but once liquidity starts flowing back, they’ll be the first to leap into action. Talk about a rebound!

Bitcoin isn’t totally at the mercy of US monetary policy. In fact, with the job market cooling off, the Fed doesn’t have much room to maneuver. As fiscal conditions stay tight, expect expansionary measures to be the only tool left in the Fed’s belt. But fear not! Liquidity should return to the markets, eventually helping to cushion the blow from a possibly harsh economic downturn and setting up for what could be a glorious rally in Bitcoin.

Disclaimer: This article is purely for informational purposes. It’s not intended as legal or investment advice, so don’t sue us if your crypto portfolio crashes. Just saying. The views expressed are solely those of the author and not necessarily CryptoMoon’s. They probably don’t know any more than you do.

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2025-11-19 02:43