Ahead of the U.S. GDP report, traders are scaling back expectations for aggressive rate cuts by the Federal Reserve. Bitcoin (BTC) is aiming to establish itself above $40,000 in European trading hours, while the dollar index remains steady in anticipation of the crucial U.S. fourth-quarter gross domestic product (GDP) data.
As of 09:38 UTC, Bitcoin is trading at $40,100, showing resilience after testing demand around $38,500 earlier in the week. The dollar index, indicating the value of the dollar against major fiat currencies, hovers near 103.70, slightly down from Monday’s highs of around 103.82.
Traders are reevaluating the likelihood of early Fed rate cuts amid the ongoing inflation challenges. Fed funds futures now suggest a 50% chance of a Fed rate cut in March, a decrease from 80% a month ago.
Market adjustments are anticipated following the release of the U.S. GDP data at 13:30 UTC today. Projections suggest a 2% seasonally adjusted annualized pace for the world’s largest economy in the final quarter of 2023, a decline from Q3’s 4.9%, marking the lowest reading since Q2 2022.
Additionally, attention is on the upcoming expiry of bitcoin and ether options on Deribit, the world’s largest crypto options exchange. Bitcoin options worth $3.75 billion and ether options worth $2.07 billion are set to expire on Friday at 08:00 UTC, representing over 85% of global activity. The market seems to be recovering steadily from initial shocks, with call-put skew increasing, indicating a shift in market sentiment, according to Luuk Strijers, Chief Commercial Officer at Deribit.
