The U.S. Federal Reserve (Fed) held an interest rate decision-making meeting. The market expects that an interest rate cut at this meeting is almost a foregone conclusion. As investors prepare for the first interest rate cut in more than four years, the cryptocurrency market moves higher. Bitcoin broke through 61,000 last night (17th) dollar level.
According to CoinGecko market quotations, Bitcoin hit a maximum of $61,242 last night, the highest level in three weeks, and then fell back to $60,249 at the time of writing, but the increase in the past 24 hours was still close to 4%.
Bitcoin is still fluctuating within a relatively narrow range, and it seems difficult to make a breakthrough until the Fed officially announces its latest interest rate decision. According to the "BTC-USDT trading pair" order data of Binance, the world's largest cryptocurrency exchange, there are a large number of sell orders between $61,000 and $62,500, indicating that the possibility of further rises in Bitcoin in the short term is suppressed.
Philipp Pieper, co-founder of Swarm Markets, said: “Although Bitcoin may experience a short-term correction due to the news of interest rate cuts, in the long term, loose monetary policy will be conducive to a new round of bull markets, including Bitcoin, Ethereum and Other market assets.
In the past, Bitcoin has had a certain correlation with technology indexes such as the Nasdaq, and has generally fluctuated with changes in the monetary policy environment. When interest rates fall, investors will seek higher-yielding assets.
Although the Fed is almost certain to cut interest rates, the market is still uncertain about the extent of the cut. According to the CME Group's FedWatch tool, traders predict a 65% chance of a 2-yard rate cut and a 35% chance of a 1-yard rate cut.
Bitfinex analysts mentioned in the report: "We expect that the cryptocurrency market may experience violent fluctuations this week, which is mainly affected by investors' expectations for interest rate cut decisions."
The report also added that the extent of the interest rate cut will affect market sentiment. If the interest rate is cut by 1 point, it may maintain a moderate risk appetite environment; while if the interest rate is cut by 2 points, it may trigger stronger buying, or on the contrary, cautious investors will collectively gain Profit settled. Analysts said:
This volatility is likely to be reflected in the Bitcoin spot ETF and perpetual contract markets, increasing further as traders adjust their positions.
BRN analyst Valentin Fournier said that as concerns around inflation and recession risks have not completely dissipated, the market may react negatively even if the Fed cuts interest rates by 2% as expected. He said:
Bitcoin prices have been choppy in recent weeks, with expectations that the Fed’s policy shift will further amplify that volatility. Technical indicators show that Bitcoin’s rally since falling to $52,500 on September 6 is losing momentum, raising the possibility of a trend reversal to the downside.
〈The U.S. Fed is almost certain to cut interest rates! Industry expectations: Bitcoin is likely to correct in the short term, but is optimistic about the long term> This article was first published on "Block Guest".
