What’s Behind Bitcoin Price Drop? Political Chaos or US Fed Meeting?

by

As a seasoned analyst with years of market experience under my belt, I can confidently say that the Bitcoin price drop below $60,000 amidst the latest assassination attempt on Donald Trump has added another layer of complexity to an already volatile market landscape. The interplay between political events and financial markets is nothing new, but the unique blend of these factors in today’s digital age makes for a fascinating study.

The price of Bitcoin dipped below $60,000 today, reaching a low of $58,112. This has left the crypto community scratching their heads, as expectations for 0.5% cuts in Fed interest rates had previously fueled gains in stocks, cryptocurrencies, and gold. Additionally, the political turmoil surrounding the 2024 U.S. presidential election and recent attempts on Donald Trump’s life have been influencing market trends.

Bitcoin Price Fell Amid Assassination Attempt on Donald Trump

On Sunday, Donald Trump, a Republican contender for president, experienced yet another attempted shooting incident close to his golf course in Florida. Authorities are currently probing the situation as several gunshots were discharged nearby.

Market mood can be swayed by political happenings that involve contenders like Kamala Harris or Donald Trump. The price of Bitcoin surged following an assassination attempt on Trump in Pennsylvania on July 13, as this incident seemed to enhance his prospects against President Joe Biden at the time. At present, the race between Trump and Harris is quite close.

Despite Trump surviving the recent assassination attempt, digital currencies linked to him like MAGA, TRUMP, and TREMP took a hit and plummeted in value.

Fed Rate Cuts Expectation in FOMC Meeting

On September 18th, the U.S. Federal Reserve is expected to reveal its monetary policy decisions, potentially causing a significant change in the trajectory of both stock and cryptocurrency markets. Following the two-day meeting of Federal Open Market Committee (FOMC) members, Jerome Powell’s subsequent speech will offer valuable insights to traders about market trends for the upcoming quarter.

A reduction of 0.5 percentage points in the Federal Reserve’s interest rate could lead to significant market activity, potentially boosting volatility. Based on the CME FedWatch tool, there’s approximately a 61% chance of a 0.5% cut and a 39% likelihood of a 0.25% reduction following the FOMC meeting. Moreover, data suggests a potential total of four 0.5% interest rate cuts from the Fed this year. Such moves are likely to ignite a substantial surge in Bitcoin’s value.

According to Jim Reid, a market strategist at Deutsche Bank, the size of the Federal Reserve’s initial interest rate reduction in this round will influence the total reduction for the entire year. If the Federal Reserve reduces rates by 0.25% on Wednesday, Deutsche Bank anticipates that their forecast will suggest a total reduction of 0.75% for the rest of the year.

With the Federal Reserve about to implement its initial rate reduction for this cycle, market anxieties are mounting and intensifying the influence of unforeseen economic data. Furthermore, there remains doubt regarding the Bank of Japan’s interest rate increase, as experts predict a rate rise in October.

How Bitcoin Price Will Move In the Next Few Days?

The cost of one Bitcoin dropped to its lowest point in the past 24 hours at $58,112, as traders unloaded their BTC when it dipped below the 50-SMA (Simple Moving Average). According to analysts at 10X Research, for Bitcoin to continue rising, it must first breach the resistance line of the triangle pattern.

What’s Behind Bitcoin Price Drop? Political Chaos or US Fed Meeting?

 

Additionally, Bitcoin experienced a significant drop, moving from the 0.618 Fibonacci retracement level down to the 0.5 Fibonacci retracement level on the daily chart. It’s anticipated that the price will hover around the $59,000 mark until the upcoming US Federal Reserve meeting.

Read More

2024-09-16 14:14