Market sentiment improved as expectations strengthened for a Federal Reserve rate cut at the December meeting. Earlier, investors anticipated a pause in monetary easing to assess the effects of previous measures, but new comments from Fed officials and fresh macroeconomic data shifted the outlook. Notably, several Fed members — including Christopher Waller and Mary Daly — voiced concerns about cooling labor-market conditions and signaled that additional rate cuts may be warranted. At the same time, September’s core Producer Price Index slowed from 2.9% to 2.6% year-over-year versus a 2.7% forecast, and retail sales slipped from 0.6% to 0.2%. This points to easing inflationary pressure but also a slowing economy, increasing the likelihood of Fed intervention.
According to the CME FedWatch Tool, the odds of a December rate cut surged from 30% to 86%, supporting non-USD assets across the board. Still, the path forward for monetary policy remains unclear: Fed officials are divided over whether the priority should be job-market stability or inflation containment. Trader sentiment also remains mixed, with the Crypto Fear and Greed Index stuck in “extreme fear” territory at 25. On the other hand, large holders have shifted to accumulation — a sign that a trend reversal could develop. Glassnode reports that the most active buyers this week were wallets holding between 1,000 and 10,000 BTC.
One notable negative development was the security breach at Upbit, South Korea’s largest crypto exchange, which briefly slowed the sector’s recovery. Unknown attackers withdrew roughly $36 million in digital assets, prompting the temporary suspension of operations. It was Upbit’s second major incident following the 2019 breach that caused $50 million in losses. These episodes highlight persistent vulnerabilities in centralized exchanges and continue to weigh on market confidence.
Overall, crypto market conditions remain fragile. Key assets are still heavily influenced by macroeconomic signals, and many major cryptocurrencies may enter a consolidation phase — or resume their decline — in the coming week.