The critical FED week has begun for Bitcoin and cryptocurrencies. On Wednesday, the FED will announce its interest rate decision and the expectation is that the first interest rate cut will come.
While it remains unclear whether the FED will cut interest rates by 25 or 50 basis points, investors continue to evaluate the possible impact of the FED's rate cut.
Amid this uncertainty, Bitcoin fell by 1.7% in the last 24 hours to $59.50, while Presto Research analyst Min Jung evaluated the reasons for the decline.
Analysts said the timing of the drop in BTC and crypto prices coincided with news of a second assassination attempt against former US President and current Republican presidential candidate Donald Trump, and that it was difficult to directly attribute the decline to Trump.
The analyst stated that the decline in price was mostly related to investors' risk aversion before the FED decision and said:
“While it is difficult to say that the price drop is directly related to the assassination attempt on Donald Trump, the timing does coincide with a sharper downward move in crypto markets.
However, we believe the more likely reason for this decline is that cryptocurrencies are giving up gains seen on Friday that were not seen in stocks, and a broader risk aversion ahead of the FOMC meeting.”
“The reality is that we are still at $58,000 and Bitcoin price has not moved in two weeks, except for a small breakout to $54,000 and $60,000. The real reason BTC and cryptocurrencies were higher on Friday was the big squeeze (50 basis point cut) in SOFR futures and the resulting equity rally, rather than anything specific to crypto. And now Bitcoin’s upward momentum has stalled due to the uncertainty of a rate cut,” said Augustine Fan, SOFA’s chief executive.
*This is not investment advice.