Bitcoin Drops Below $60,000 Ahead of Fed’s Expected Rate Cut
Bitcoin has fallen below the $60,000 level as the market looks to the Federal Reserve to cut interest rates this weekend, according to Odaily. The Fed’s impending policy adjustment has created a sense of unease in global markets. It would be the first U.S. rate cut in more than four years and would signal a more accommodative financial environment that is generally seen as favorable for higher-risk assets like cryptocurrencies. However, investors remain uncertain about the scope of the rate cut expected on Wednesday and how the market will react to Fed officials’ latest projections, known as dot plots, and Fed Chair Jerome Powell’s briefing.
“The rate cut is less important than the signals presented in the press conference and the latest dot plot. If the guidance and press conference are significantly more moderate, we expect Bitcoin to rise,” said Sean McNulty, head of trading at liquidity provider Arbelos Markets. Bitcoin’s price rose 10% in the seven days ending Sunday, its biggest weekly gain since July, likely reflecting increased bets on a 50 basis point rate cut by the Fed.
Investors are giving the Fed meeting much more weight than we’ve seen recently in the Bitcoin options market, said Caroline Mauron, co-founder of digital asset derivatives trading liquidity provider Orbit Markets. The outlook for monetary policy is arguably the primary driver of Bitcoin’s short-term moves, overshadowing the impact of the U.S. presidential election, at least for now.
