Key Points:
Bitcoin fell 2.6% on Monday, trading at $58,470 as of 10:41 a.m. in Singapore. Markets are preparing for the Federal Reserve’s first interest rate cut in over four years. Smaller tokens like Ethereum and Dogecoin also lost as investors await more details about the rate cut, which is expected later in the week.
The first U.S. rate cut since 2020 usually presages looser financial conditions, suitable for riskier assets such as cryptocurrencies. But for now, the focus will be on the rate cut, a set of fresh economic projections, Powell’s news conference, and perhaps most importantly for investors, the “dot plot,” which gives a sense of future interest rate changes.
Sean McNulty, a director of trading at Arbelos Markets, opined that ” the cut is less important than the signalling during the press conference and the release of the updated dot plot.” With volatility already priced in from the options market, Powell’s dovish tone would determine Bitcoin’s outperformance.
Political developments are also infringing upon Bitcoin’s short-term price movement. Over the weekend, former U.S. President Donald Trump survived another assassination attempt at his West Palm Beach golf course. Trump’s involvement with crypto, most notably using digital assets for campaign funding, piqued leverage on the former U.S. president’s political fortunes and Bitcoin’s performance.
This development replicates a similar surge witnessed in July after there was an assassination attempt on Trump when speculations were that his chances for re-election had gone up.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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