Bitcoin Maintains Stability as Investors Eye Federal Reserve Rate Decisions

Bitcoin continues to trade steadily, hovering near 160 million won, as market participants await the Federal Reserve’s anticipated decision on interest rate cuts. While a cautious optimism surrounds risk assets like Bitcoin, some analysts flag potential headwinds due to rising long-term Treasury yields, which might dampen broader market sentiment.

Bitcoin Price Trends Reflect Stability

As of 8:30 a.m. KST on the 15th, Bitcoin (BTC) was trading at 160.22 million won on South Korea's Upbit exchange, reflecting a slight daily gain of 0.05%. Conversely, on Binance, the world's leading cryptocurrency trading platform, Bitcoin dipped 0.41% to $11,539.2.

Other major cryptocurrencies displayed mixed performances. The CoinDesk20 index, tracking the price trends of 20 key altcoins, saw an overall gain of 2.85%. Ethereum (ETH) registered a decline of 1.05%, landing at $4,611, while Solana (SOL) edged down 0.42% to $241.08.

Within the broader context of the crypto market, liquidations over the past 24 hours reached approximately $265.62 million (around 370.2 billion won), according to CoinGlass. Bitcoin liquidations accounted for $13.9 million (roughly 19.3 billion won), with two-thirds (68.9%) of liquidated positions being bullish long trades.

Federal Reserve Poised for Rate Cuts

Market analysts forecast that the Federal Reserve will lower its benchmark interest rate to a range of 4.00%-4.25% during its upcoming meeting on the 17th. A more dovish monetary policy could follow in subsequent months, potentially pushing interest rates into the 3% range by the end of next year—a shift some believe has already been partially reflected in asset prices.

A key factor underpinning these rate cuts is the softening U.S. labor market. Michael Gapen, chief U.S. economist at Morgan Stanley, stated, "The Fed has compelling data outlining a steady decrease in labor demand for the past four months.” He suggested that this economic context would encourage the central bank to re-prioritize employment stability while temporarily easing its focus on inflation control.

Rising Treasury Yields Remain a Concern

Despite the shift toward rate cuts, concerns about rising long-term Treasury yields persist. Factors like widening fiscal deficits and embedded inflation trends are expected to exert upward pressure on these yields, which could complicate the Fed’s easing efforts.

The U.S. government’s recent fiscal policies, including extending tax cuts initiated during the Trump administration and boosting defense spending, will likely compound this issue. The Congressional Budget Office (CBO) projects that these measures could increase the fiscal deficit by over $2.4 trillion (approximately 3,332 trillion won) within the next decade and add $5 trillion (nearly 6,943 trillion won) to the national debt.

T. Rowe Price, a global asset management firm, underscored these challenges in its latest report: “A substantial increase in the U.S. Treasury’s issuance of long-term bonds is inevitable, driving yields higher.” The report also highlighted a sentiment of caution among bond investors, who are demanding heightened yields to hedge against intensified inflation risks and a weakening U.S. dollar.

Financial market history offers precedence for such trends. For instance, the Federal Reserve lowered rates three times from September to December last year, yet long-term yields rebounded due to the overarching factors of fiscal expansion, entrenched inflation, and economic stability.

Effects on the Cryptocurrency Market

Movements in the traditional bond markets are also likely to influence digital asset valuations. Historically, cryptocurrencies like Bitcoin have demonstrated considerable sensitivity to macroeconomic factors. Between October and December last year, Bitcoin rallied from $70,000 to surpass the $100,000 mark as dovish monetary policies and growing institutional interest boosted optimism.

Currently, however, digital asset markets are facing leaner institutional inflows and reduced bullish momentum tied to policy shifts. Rising long-term Treasury yields could reintroduce downward pressure on cryptocurrencies. CoinDesk recently warned, “The interplay between long-term yields and macroeconomic inflation is critical. Speculative interest may not be strong enough to sustain bullish Bitcoin prices in a high-risk environment.”

Sentiment Indicator Suggests Cautious Optimism

Investor sentiment in the cryptocurrency space has shown mild improvement. The Alternative Fear & Greed Index, which measures market dynamics, posted a neutral score of 55, a slight increase from the previous day’s 52. This metric reflects balanced sentiment, with closer-to-zero values indicating sell-side pressure and scores nearing 100 pointing to bullish enthusiasm.

As investors navigate these mixed signals, developments in interest rate policies and bond market activity will likely dictate Bitcoin and broader digital asset market performance in the coming months.

For real-time cryptocurrency news and updates, follow Block Media’s dedicated channels.