Bitcoin (BTC) Price: Holds $85,000 Support Ahead of November Inflation Data Thursday

TLDR

• Bitcoin is trading around $86,600 after swinging between $85,000 and $90,000 in the past 24 hours
• President Trump said the new Federal Reserve chairman will cut interest rates “by a lot” and mentioned Christopher Waller as a potential candidate
• U.S. inflation data for November is expected to show CPI at 3.1%, which could affect Federal Reserve rate decisions
• The Federal Reserve signaled it may not cut rates in January, with markets giving a 73.4% chance of no rate change
• Analysts say bitcoin’s volatility comes from thin liquidity, reduced ETF inflows, and uncertainty about monetary policy

Bitcoin is currently trading near $86,600 after a day of wild price swings. The cryptocurrency briefly jumped to around $90,000 early Wednesday morning before dropping back below $86,000.

The price volatility comes as traders deal with thin liquidity and uncertainty about the economy. Bitcoin moved between $86,000 and $90,000 in the past 24 hours, leaving many traders unsure about the next direction.

Nick Ruck from LVRG Research said the recent swings in bitcoin come from broader market concerns. He pointed to reduced ETF inflows, deleveraging in derivatives, and increased correlation with stocks as key factors.

Vincent Liu from Kronos Research said bitcoin sitting around $85,000 to $86,000 is less about seasonal patterns and more about repricing. He explained that after a strong run, money flows have cooled down and leverage has reset. The market is now waiting for a real catalyst.

Federal Reserve Rate Decisions

The crypto market faces uncertainty heading into 2026 after Federal Reserve Chair Jerome Powell signaled the central bank may not cut rates in January. The Fed cut rates at the past three consecutive meetings but is now taking a more cautious approach.

CME Group’s FedWatch Tool shows a 73.4% chance the Fed will not cut rates next month. Prediction market platform Polymarket puts the odds at 76% that rates will stay in the current range of 3.50% to 3.75%.

President Trump said Wednesday he will soon announce the next Federal Reserve chairman. He stated the new chairman will be someone who believes in lower interest rates “by a lot.”

Trump said mortgage payments will come down even further early in the new year. He previously stated he wants U.S. borrowing rates at 1% or lower.

Trump interviewed Christopher Waller on Wednesday, a pro-crypto Fed Governor who supports lower interest rates. Kevin Warsh and Kevin Hassett are seen as the two leading contenders among five candidates.

November Inflation Data

U.S. inflation data for November is expected Thursday. The headline consumer price index is forecast to increase to 3.1% on a yearly basis, up from October’s 3%.

Core inflation, which excludes food and energy prices, is also expected at 3.1%. This remains one full point above the Fed’s 2% goal.

Markets currently expect at least two 25-basis-point Fed rate cuts next year. The inflation data could change these expectations depending on the results.

The October inflation report was canceled due to a government shutdown. This left the Federal Reserve without key economic data for weeks.

Dr Mohamed A. El-Erian said markets will look for two things in the data. First, whether the disinflation trend in services has stronger momentum. Second, what remains of tariff-driven price increases in goods inflation.

If the data shows disinflation, markets might price in more rate cuts for 2026. However, bitcoin did not show a sustained bullish reaction to Tuesday’s jobs data, which showed the jobless rate at its highest since September 2021.

The 10-year Treasury yield has stayed above 4% in recent months despite Fed easing. Higher yields boost the appeal of fixed-income instruments and reduce interest in risk assets like bitcoin.

MSCI is reviewing the index eligibility of digital asset treasury companies. Passive outflows could reach up to $2.8 billion if firms holding more than 50% exposure to crypto are excluded.

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