Major cryptocurrencies are trading higher, with key events including Federal Reserve (Fed) and Bank of Japan (BOJ) interest rate decisions and earnings reports from influential Mag 7 stocks lined up for the coming week.
The Fed is likely to cut interest rates
The Federal Reserve is widely expected to cut its key interest rate by 25 basis points to 4% on Wednesday, bringing the total easing since last September to 150 basis points.
CME Fed funds futures are pricing in a near certainty that the Fed will cut interest rates by 25 basis points on Wednesday and at the December meeting.
Consensus expects further rate cuts next year, supporting a continued bullish trend for bitcoin and the broader 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 rally follows signs of seller exhaustion near the 200-day simple moving average (SMA), which is currently located at $108,800.
However, prices have yet to surpass the 50-day SMA of $114,250, a widely recognized barrier that needs to be overcome to restore bullish momentum in the near term.
Other major tokens, such as ether and solana has increased by 3% over the past 24 hours. Payments-focused XRP has surged past its 200-day SMA at $2.60, suggesting renewed bullish momentum.
Powell to maintain focus on jobs
The upcoming Fed rate decision will be issued without economic forecasts or rate projections, making Fed Chairman Jerome Powell’s press conference the most important event to watch.
Powell is likely to reiterate the message from September that downside risks to the labor market have become more of a concern, while tariff-induced inflation is expected to be transitory and short-lived.
The dovish talk is likely to bolster hopes for further easing over the coming months, potentially contributing to upward momentum in risk assets.
Powell will most likely be asked about the impact of the ongoing US government shutdown on its economic and interest rate projections.
However, the boss is likely to play down the shutdown while sticking to economic forecasts from September, which showed prices rising by 3% annually in 2025 and then falling to 2.6% in 2026. September forecasts also showed unemployment averaging 4.5% in the fourth quarter of 2025, falling from 42.3% in the end to 42.7%.
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 September guidance that prioritizes workers’ 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 approaching the point where quantitative easing (QT), or the balance sheet unwinding program that began in 2022, could be ended.
“Our long-term plan is to stop the balance when reserves are somewhat above the level we consider consistent with ample reserve conditions. We may approach that point in the coming months,” Powell said.
The banking system’s reserves recently fell below $3 trillion, breaking a level widely seen 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 tariff decision
On Thursday, the Bank of Japan (BOJ) will issue a policy statement with Governor Ueda at the center following the interest rate decision.
The central bank is expected to keep interest rates stable. But fresh economic forecasts and interest rate forecasts can create market volatility. “Markets are pricing in no rate change at this meeting, but about half of a quarter-point cut in December and a full rate cut in 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 famous Mag 7 group – are among the main tech names due to announce their earnings this week.
Traders will closely scrutinize these reports for insights into AI-related tech spending, which has been a major driver of the rise in risk assets since 2023. Any sign of a slowdown in this spending could trigger heightened risk aversion in the market.
Trump-Xi meeting
Trade tensions between the United States and China eased on Sunday after both sides announced 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.
