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Major cryptocurrencies are trading higher, with key events, including Federal Reserve (Fed) and Bank of Japan (BOJ) rate decisions, and earnings reports from influential Mag 7 stocks lined up for the week ahead.
Fed likely to cut rates
The Federal Reserve is widely expected to cut its policy rate by 25 basis points to 4% on Wednesday, bringing the total easing since September last year to 150 basis points.
The CME Fed funds futures are pricing in near certainty that the Fed will cut rates by 25 basis points on Wednesday and at its December meeting.
The consensus anticipates further rate cuts next year, supporting a continued bullish trend for bitcoin and the wider crypto market.
Bitcoin is already showing strength, rising 1.7% over the past 24 hours to $113,600, extending its three-day winning streak. The upswing follows signs of seller exhaustion near the 200-day simple moving average (SMA), currently placed at $108,800.
Prices, however, have yet to surpass the 50-day SMA at $114,250, a widely recognized barrier that must be overcome to restore near-term bullish momentum.
Other major tokens, such as XRP$2.6413, ether ETH$4,083.17, and solana SOL$199.14, have risen by 3% over the past 24 hours. Payments-focused XRP has risen past its 200-day SMA at $2.60, hinting at renewed bullishness in momentum.
Powell to maintain focus on jobs
The upcoming Fed rate decision will be issued without economic forecasts or interest rate projections, making Fed Chair Jerome Powell’s press conference the key event to watch.
Powell is likely to reiterate the September message that downside risks to the job market have become more concerning, while tariff-induced inflation is expected to be transitory and short-lived.
The dovish talk will likely bolster hopes for additional easing over the coming months, potentially adding to upward momentum in risk assets.
Powell will most likely get questioned about the impact of the ongoing U.S. government shutdown on its economic and interest rate projections.
The chief, however, is likely to downplay the shutdown while sticking to September economic forecasts, which showed prices rising at a 3% annual rate in 2025 and then falling to 2.6% in 2026. September forecasts also showed the jobless rate averaging 4.5% in the fourth quarter of 2025 and eventually falling to 4.3% by 2027.
Note that labor market weakness began before the ongoing government shutdown, so the absence of fresh jobs data due to the shutdown is unlikely to prompt Powell to reverse the September guidance prioritizing labor concerns over inflation.
QT talk
According to Scotiabank, a more meaningful development could come from the Fed’s balance sheet following Powell’s recent speech, in which he indicated that conditions are nearing the point at which to end quantitative tightening (QT) or the balance sheet runoff program that began in 2022.
“Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions. We may approach that point in coming months,” Powell said.
The banking system’s reserves recently fell below $3 trillion, breaching a level widely perceived as ample and signaling tighter liquidity conditions.
While a potential end to quantitative tightening (QT) does not guarantee an immediate resumption of balance sheet expansion or quantitative easing (QE), it could nevertheless boost optimism across crypto social media.
BOJ rate decision
On Thursday, the Bank of Japan (BOJ) will issue a policy statement with Governor Ueda taking centre stage following the rate decision.
The central bank is expected to keep rates steady. However, fresh economic and interest rate forecasts could breed market volatility. “Markets are priced for no rate change at this meeting but about half of a quarter-point cut in December and full cut pricing by early 2026 at either the January or March meetings,” Scotiabank said in a market note.
Mag 7 earnings
Apple, Meta Platforms, Alphabet, and Microsoft – members of the famed Mag 7 group – are among the key tech names set to announce their earnings this week.
Traders will closely examine these reports for insights into AI-related tech spending, which has been a major driver behind the rise in risk assets since 2023. Any signs of a slowdown in this spending could trigger increased risk aversion in the market.
Trump-Xi meeting
The U.S.-China trade tensions eased Sunday after both sides announced that a trade deal was nearing between the world’s two largest economies.
The comments came days after the White House confirmed that President Donald Trump and his Chinese counterpart Xi Jinping are scheduled to meet in person on Thursday in South Korea. This highly anticipated meeting will take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit.
The positive soundbites ahead of the meeting have raised expectations for a potential trade deal, meaning any disappointment could trigger a risk-off reaction among investors.
