Bitcoin Price Plummets as Fed Caution Holds It Back
Working Title: "Bitcoin's Downtrend Persists Despite Federal Reserve Rate Cut Announcement"
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Let's start the analysis! ๐
This week, the Bitcoin market has started in the red. The Federal Reserve's (Fed) announcement of future rate cuts was unable to reverse the downward trend. Bitcoin plunged to $63,000 at the beginning of the week, and despite Fed Chairman Jerome Powell's announcement of an additional rate cut plan, it didn't significantly impact the intraday trend. However, despite this adjustment, Bitcoin's price appears poised to close Q3 with positive returns.
As of September 30, Bitcoin (BTC) had dropped around 4% from its peak of $65,634, recording an intraday low of $63,049. At that time, Bitcoin was trading at $63,344, a 3.6% drop over the past 24 hours. Powell, speaking at the National Economists Club in Nashville, stated that future rate cuts would not be as aggressive as the recent 50 basis points (0.5%) cut.
Powell said, "If the economy moves as expected, the market should anticipate two rate cuts in 2024, but these will be gradual reductions of 0.25% each." He added that policy this year is moving towards a more neutral stance, but there is no fixed path.
Powell's announcement came just two weeks after the Federal Open Market Committee (FOMC) cut rates by 50 basis points for the first time since March 2020. According to futures market predictions, the Fed is likely to approve a cautious 0.25% cut in November, but a more aggressive move is expected in December. Data from CME Group's FedWatch Tool indicates a 48% probability of a 0.5% rate cut at the December 18 FOMC meeting. Before this announcement, the market was expecting another 0.5% rate cut at the next meeting.
Bitcoin traders are still optimistic about Q4. Powell's announcement came after major cryptocurrencies recorded three consecutive weeks of gains. Bitcoin had started September on a significant downtrend, falling 11% from September 1 to 6. However, its price rebounded after the FOMC cut rates by 50 basis points on September 18.
According to data from CoinGlass, Bitcoin's price rose by 7% in September, and Q3 showed a 0.6% increase. Quinton Franรงois, co-founder of WeRate, stated, "In every election year, October, November, and December have ended in green (uptrend), and in every year when September was green, October, November, and December were also green." Q4 starts tomorrow.
That's all. โจ
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