Bitcoin set to close November in the red – what comes next?

The expected brief relief rally for Bitcoin after the fall in the first weeks of November has now materialized, with the price trading above $90,000 again. However, it’s clear that Bitcoin’s problems are not over yet. However, some analysts are adamant that a Fed shift could bring salvation from a further decline.

Opportunity

Bitcoin’s recent pullback has been memorable. From an all-time high of $126,000 in mid-October, it fell all the way back to a low of around $80,000 in mid-November. Although panic reigned when the decline accelerated in the second week of November, some analysts are now daring to say that Bitcoin at $90,000 is still a golden opportunity.

I’m not one of those people and think this is just a temporary rebound, but let’s take a look at what actually happened.

Bitcoin’s recent decline was driven by two simultaneous events. First, there was the fear that the Federal Reserve might not lower interest rates again in December, and second, there was a growing belief that some tech stocks were overpriced (and thus that AI might be a bubble). A few weeks later, calm has returned.

Currently, the likelihood of the Federal Reserve lowering interest rates in December is increasing again (due to rising inflation), and Nvidia appears to still be able to deliver strong results (which some interpret as good news for AI). Analysts believe that investors should primarily focus on the Federal Reserve and Bitcoin ETFs in the United States in the short term. If both indicators turn positive (a Fed willing to lower interest rates in December and renewed investment in Bitcoin ETFs), they believe a short-term rise in the Bitcoin price is possible.

My position remains unchanged at this point. I fear this rally will be short-lived and that we haven’t yet reached the bottom.