Market Insights November 10, 2025

Cryptocurrencies: technical indicators provide support despite unfavorable seasonality.

The outlook for cryptocurrencies in 2025 remains mixed. While Bitcoin shows a modest gain, most digital assets are trending lower, diverging from the strong performance of the Nasdaq. Two opposing forces are at play: on one hand, prices are stabilizing near key technical support zones, and the increasing institutionalization of the sector could provide structural support. On the other hand, Bitcoin’s halving cycle weighs on the outlook. This mechanism, unique to Bitcoin, reduces the reward granted to miners every four years, thereby lowering supply. Historically, this scarcity has supported prices, albeit with a lagged effect: the quarters preceding and following the halving are typically bullish, followed by a sharp correction. Given that the latest halving occurred in April 2024, we may have already passed the peak of this cycle. As such, the market remains torn between technical optimism and seasonal caution.

Fed: emerging divisions amid unprecedented circumstances

As the Federal Reserve's December policy meeting approaches, the previously dominant consensus around continued rate cuts is showing signs of erosion. While the Fed initiated an easing cycle in September, lowering policy rates twice, the prospect of an additional cut is now facing internal divergence. Some governors advocate for continued easing to support a vulnerable economy, while others urge caution, warning that overly accommodative policy could rekindle inflationary pressures.

This discord comes at a particularly delicate juncture: the federal government's budgetary deadlock has suspended the publication of official economic data, depriving both markets and policymakers of critical reference points. In the absence of comprehensive data, the Fed must rely on fragmented indicators and conflicting signals. Prior to the shutdown, available data pointed to a gradual yet orderly slowdown in activity, reinforcing the case for sustained monetary support.

Nevertheless, Jerome Powell has maintained a cautious tone. The Fed chair recently downplayed expectations of a December rate cut, reiterating that the rate trajectory will depend primarily on evidence of a sustained normalization in inflation.

This stance contrasts with that of several voting members, who have reignited hopes of a final cut this year through their public statements. These discrepancies underscore the complexity of calibrating monetary policy amid heightened political uncertainty, further compounded by tensions surrounding the Fed’s independence and ongoing fiscal imbalances.

A decision to pause in December would not signify the end of the easing cycle. Macroeconomic fundamentals, particularly a cooling labour market and weak corporate sentiment, support further rate reductions. Additionally, the economic fallout from the government shutdown is likely to dampen fourth-quarter activity, potentially prompting the Fed to resume its easing stance once clarity returns.

Financial markets, highly sensitive to any shift in Fed communication, are beginning to price in a potential pause. Nonetheless, we view another rate cut at the December meeting as probable. Mounting pressure on policymakers, illustrated by early signs of disruption in air traffic, may accelerate efforts to resolve the shutdown. The recent consolidation in US equities is expected to be short-lived. A more accommodative monetary environment, coupled with the prospect of a gradual recovery in US growth, should continue to support risk assets.

This week’s figure: 4%

 The Bank of England has maintained its policy rates at 4%, a level that remains among the highest across industrialized nations. Post-meeting commentary suggests that a rate cut could occur as early as December.