Bitcoin may benefit as global tightening slows, Binance Research says

Bitcoin could find support before major central banks start cutting rates if the spread of rate hikes continues to slow, Binance Research said Tuesday.

Eight of the 10 central banks Binance tracks had raised rates over the last six months, including Sweden’s announced increase on Nov. 4, with the momentum of tightening starting to ease since its July peak, Binance Research said in a Tuesday report shared with Cointelegraph.

“Whether this easing continues into early 2027 will be key to judging whether the macro backdrop is turning less hostile for crypto,” the report said.

Binance pointed to the previous cycle. Bitcoin (BTC) bottomed in November 2022, and its six-month return turned positive in February 2023, before any of the central banks in the index began cutting rates.

Pace of G10 banks tightening and Bitcoin’s 6-month returns. Source: Binance Research 

Similarly, in 2024, monetary tightening measures led to Bitcoin delivering its “strongest” six-month return of the cycle, exceeding 160% in March, Binance said.

“In each case, BTC moved with the direction of global policy, not its level,” the report adds. 

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December rate hike odds mount following Waller’s speech

A US rate increase remains in play. Federal Reserve Governor Christopher Waller said Tuesday he was leaning toward a quarter-point hike in December and would consider a half-point move if core inflation remained elevated. Odds of a 25-basis-point hike in December rose from 76.3% to 96.3% on Tuesday, according to CME Group’s FedWatch Tool. 

In a Nov. 2 report, Bitwise also argued that a slowdown in economic growth expectations could eventually prompt central banks to pivot towards easing monetary policy, potentially creating a more favourable environment for Bitcoin.

BTC/USD, 1-year chart. Source: CoinMarketCap

Bitcoin’s price fell 3.5% during the past week, extending its one-year decline to 30%. The world’s first cryptocurrency was trading at $74,131, or 41% below its $126,198 all-time high, according to CoinMarketCap.

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