βThe key is to wait. Sometimes the hardest thing to do is to do nothing.β - David Tepper
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A wave of profit-taking hit the cryptocurrency market on Monday morning, making the price fall to the $41k - $42k level. We saw a massive exit from long positions in low liquidity, with open interest resetting to regular levels.
Strong demand for risk assets in traditional markets suggests the market will try to return to its previous growth track. This did not break the bullish trend. In our view, it will remain in force if BTC manages to hold above $40k as momentum and on-chain fundamentals remain bullish.
Two significant events are anticipated: the November U.S. Consumer Price Index (CPI) report, scheduled for release on Tuesday, and the Federal Open Market Committee (FOMC) meeting on Wednesday. Both can potentially influence the U.S. dollar and impact risky assets like BTC.
While markets don't expect the central bank to lower borrowing costs this month, the press conference from Fed Chairman Jerome Powell will be scrutinized for signs of rate-cut timing, with the market's current pricing in the first cut as soon as March. However, a higher-than-expected inflation figure in the CPI report could increase the chances of the Fed considering interest rate hikes in the future or maintaining rates at current levels for an extended period.
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