As of around 6 p.m. Beijing time, Binance spot prices were approximately: $BTC about $73,700 (down about 1.1% over 24 hours), still clearly above the overnight low of about $72,700, but still some distance from the intraday high of about $74,800 and the $75,000 area commonly seen before CPI; $ETH about $2,056 (down about 2.3%), continuing to underperform; $BNB about $680 (down about 1.6%). The Fear & Greed Index is at 29, still in “Fear” territory. Prices have recovered from the sharp wick down, but macro pricing has not recovered along with them.
1. First, distinguish between a price rebound and “rate-hike expectations”—they are not the same thing.
October CPI, released last night at 21:30, came in above market expectations: headline CPI rose 0.4% month over month, and core CPI rose 0.3%. Afterward, $BTC briefly dipped to around 72,700 before returning to around 73,700 during the day. Many people may instinctively think, “The bad news is out of the way.” But the bond market tells a different story: according to the U.S. Treasury’s daily yield data, the 2-year Treasury yield closed at 4.73% on November 10, up 17 basis points from 4.56% the previous day. Bloomberg and other outlets reported that this was one of the biggest single-day increases in about 19 months. The 2-year yield more closely tracks the Fed’s policy path. It didn’t fall along with the coin price, which shows that “money getting more expensive” wasn’t undone by a single long lower wick.
II. The percentages on FedWatch are not a Fed decision
CME FedWatch converts pricing in federal funds futures into probabilities of “how much the Fed might raise rates at its next meeting.” According to public reports from Investing.com, Gate, and others, after CPI was released, the market priced in a December rate hike as “almost certain”: the probability of a 25-basis-point hike was around 90%, a 50-basis-point hike around 10%, while holding rates was barely priced in at all. A week earlier, the probability of a 25-basis-point hike was still around 70%. These figures change as trading progresses, so there’s no need to memorize any particular decimal. What beginners really need to remember are three things: First, these are implied probabilities from the futures market, not the result of a Fed vote. Second, “a 90% chance of a 25-basis-point hike” means “the market thinks there’s little chance of no hike,” not “the hike has already happened.” Third, what tends to matter more for prices is the direction in which probabilities are changing and the shift between 25 and 50 basis points, rather than the absolute figures themselves.
III. A simple habit for comparison
This afternoon’s market update already noted that ETF selling pressure is easing, but stablecoins are still contracting and there’s little sign of new buying. Adding the macro picture gives us a more complete way to read the market: look at whether prices have recovered, and also whether rate-hike probabilities and the 2-year yield have cooled. If coin prices rebound but rate expectations remain at “almost certain to hike,” that looks more like a recovery after a shock than the end of the bad news. Related trading pairs to watch: BTCUSDT, ETHUSDT, BNBUSDT.
What do you think?
1) $BTC has recovered from around 72,700 to around 73,700, but a December rate hike is still almost certain. Do you see this as a recovery after an emotional sell-off, or do you think macro repricing isn’t over yet?
2) Would you pay more attention to changes in the probabilities of 25- and 50-basis-point hikes on FedWatch, or simply look at the direction of the 2-year Treasury yield? Why?
#新手科普 #美联储 #RateHikeExpectations
Investing involves risk. Make decisions carefully. The above is for information sharing and discussion only and does not constitute investment advice.