Bitcoin (BTC) stayed lower at the Aug. 1 Wall Street open as crypto shrugged off fresh central bank interest rate cuts.
Dovish Fed offers no respite to Bitcoin bulls
Data from Cointelegraph Markets Pro and TradingView showed BTC price lacking momentum after dropping 2.4% the day prior.
Downside persisted despite the United States Federal Reserve adopting a dovish tone at the latest meeting to decide on interest rate changes.
In a press conference following the Federal Open Market Committee's (FOMC) decision to leave rates unchanged, Fed Chair Jerome Powell hinted that a cut could come at the next meeting in September.
“We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent,” he said in a prepared statement.
“The second-quarter’s inflation readings have added to our confidence, and more good data would further strengthen that confidence. We will continue to make our decisions meeting by meeting.”
Markets, which had already priced in 100% odds of a September cut, saw this ultimately being 0.25%, per data from CME Group’s FedWatch Tool.
While US equities reacted well to the event, crypto showed little interest in following suit, with BTC/USD hitting local lows of $63,400 — its lowest since July 19.
“The mental illness continues. Historically, liquidity sweeps fail if they've been endlessly frontrun,” popular trader Crypto Chase summarized to X followers on the day.
“I don't have a strong read here, but I think anywhere from mid 61's to 59 is possible. Bids simply depend on how aggressive/confident you are. Accept below 59 is a bad look.”
Fellow trader CrypNuevo meanwhile saw the potential for a short squeeze from near current levels.
Noting that the bulk of liquidation levels lay above, not below spot, he predicted that such an event could come before the weekend.
Crypto markets "on edge"
Zooming out, trading firm QCP Capital said that inflows into the newly-launched US spot Ether exchange-traded funds (ETFs) could provide a short-term narrative for crypto market sentiment.
Related: Bitcoin whales go on ‘unprecedented’ $23B July buying spree — New data
“Unfortunately, the rally in equities was not felt in crypto. Crypto experienced a broad sell-off overnight and into this morning,” it wrote in its latest bulletin to Telegram channel subscribers.
“The market remains on edge as traders pay close attention to daily ETH ETF outflows and further supply pressures from Mt Gox and US government.”
QCP saw ongoing posturing by US Presidential candidates playing a key role for crypto going forward, with markets “potentially rangebound until the next catalyst.”
“Longer-term, discussions among US Presidential candidates and Senators regarding a sovereign Bitcoin reserve, and the potential for other nations to follow suit, could fundamentally alter the cryptocurrency landscape,” it continued.
“The establishment of a U.S. or sovereign ‘put’ on BTC prices may have significant implications, potentially making accumulation on dips a strategic investment approach.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
