Fed Policy Split Drives Derivatives Activity as Crypto Teeters on Brink of Easing

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Fed Policy Split Drives Derivatives Activity as Crypto Teeters on Brink of Easing

Bitget-RWA2025/11/22 19:26

By:Bitget-RWA

- Fed policy uncertainty drives derivatives bets, with CME FedWatch pricing 69.7% chance of 25-bp December rate cut amid mixed inflation and labor data. - Crypto markets anticipate easing cycle, but remain fragile as Crypto Fear & Greed Index hits "extreme fear" level 14 despite Coinbase's bearish odds assessment. - Crude oil drops on U.S. Ukraine peace plan and OPEC output hike, while dollar strength compounds risks for rate-cut-sensitive commodities. - CME Group faces scrutiny after $2M insider sale, yet

Bitcoin remained calm over the weekend, masking heightened activity in derivatives markets where investors are positioning for a possible Federal Reserve rate reduction and increased volatility in oil and stock futures. The cryptocurrency sector is on alert for a potential change in monetary policy,

with Coinbase Institutional suggesting

that the likelihood of a December rate cut is "not accurately reflected" despite ongoing inflation worries.

The minutes from the Fed's October meeting, which revealed differing opinions among officials,

have prompted traders to turn to the CME Group's FedWatch tool

to estimate a 69.7% probability of a 25-basis-point rate reduction in December. This expectation comes amid a busy economic calendar featuring significant data releases,

such as U.S. GDP, durable goods figures

and inflation indicators, all of which could influence the Fed's next move. Recent remarks from Federal Reserve Chair Jerome Powell, who has expressed caution regarding rate cuts, have added to the uncertainty,

with markets now factoring in a possible December adjustment

as inflation risks evolve alongside mixed employment and manufacturing reports.

Fed Policy Split Drives Derivatives Activity as Crypto Teeters on Brink of Easing image 0

The

CME Group

is also drawing attention after a senior executive sold $2 million in company shares,

sparking concerns about confidence within the organization

regarding the future of the derivatives powerhouse. Nevertheless, analysts at WarrenAI continue to view

CME

as a leading exchange stock for its reliability and returns,

pointing to its 4.5% dividend

and recent advancements in prediction markets. The firm posted a record average daily volume for October, marking an 8% increase from the previous year, and its shares were upgraded by Deutsche Bank and Piper Sandler following new strategic initiatives.

Within the crypto space,

hopes for a loosening cycle

have sparked renewed enthusiasm, with experts like Curb forecasting a "significant rally" should the Fed take action. Still, the market remains vulnerable, as the Crypto Fear & Greed Index dropped to an "extreme fear" reading of 14,

indicating persistent bearish attitudes

. At the same time, oil prices fell sharply after news of a U.S. peace proposal for Ukraine,

while OPEC's intention to boost production

further pressured prices. The strong U.S. dollar also dragged down commodities, adding to the challenges facing markets already wary of potential rate cuts.

As the week progresses, investors will closely monitor major economic reports—including October's nonfarm payrolls and manufacturing data—for insight into the Fed's direction. For now, the dynamic between cryptocurrencies, commodities, and central bank actions highlights the delicate state of a market still adjusting from tightening to easing policies.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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