Bitcoin continued to fluctuate in a narrow range near the $60,000 level yesterday (18th) until the Federal Reserve announced a rate cut at 2 a.m., then it went up and down within three hours, briefly breaking through $61,000 before quickly falling.
However, after regaining its footing at $60,000, Bitcoin started a rapid rise after six o'clock earlier. At the time of writing, it reached a high of $62,397, up 4.08% in the past 24 hours, setting the highest price since the end of August.
The Federal Reserve cut interest rates by 50 basis points last night
It was both unexpected and reasonable. After all, judging from the expectations of market surveys, the probability of a 50 basis point rate cut has risen to 60%. This is always the way the Federal Reserve controls market expectations. A 25 basis point rate cut would be dovish. Fortunately for the market, Bitcoin did not immediately surge by 10%+. I am happy to see this pace of growth.
It is said that a 50 basis point rate cut indicates that the fundamentals are not very good. In fact, the trading recession is a bit too large. It may not be possible to achieve a market like 312 even after half a year. Through the monetary policy of the Federal Reserve and market expectations, it may not come after the Bitcoin bull market is over... Let the violent bull fly for a while~
In addition to announcing the first rate cut in more than four years, the latest FOMC projections show the Fed will cut rates two more times in 2024, with most officials expecting the central bank to cut rates by a total of 100 basis points this year. Rates are expected to fall further in 2025, with a forecast of 3.4%, with long-term rates bottoming out at 2.9%. This typically helps stimulate markets as traders tend to allocate to risky assets on the prospect of a return to loose monetary policy.
Will Bitcoin Soar After the Fed Cuts Rates?
After the Fed cuts rates, more liquidity will flood into the market. The growth in liquidity could provide the impetus for Bitcoin to hit new highs this fall. They will increase the number of printing presses, significantly increasing the money supply. This will cause inflation, which can be a bad thing for certain types of businesses. But for an asset with a limited supply like Bitcoin, it will provide a light-speed ride!
A return to momentum behind a bitcoin ETF could push bitcoin higher as demand for the leading cryptocurrency by market cap grows. Bitcoin added $250 million in value in a recent day, its highest level in more than a month. The surge in demand helped push bitcoin’s price above $62,000 in September.
The Fed’s decision to start cutting interest rates will likely be the first in a series of consecutive rate cuts. Many expect this move to continue until 2025. In a recent speech in Jackson Hole, Wyoming, Fed Chairman Jerome Powell said he believes inflation has been overcome. However, there is still a long way to go to make up for the high interest rates of the past few years. As interest rates continue to fall, it will be important to track the behavior of Bitcoin.
The interest rate cut cycle has begun, and the next market trend has been clear, but it still needs time to brew. Don’t miss the opportunity. (I plan to ambush some low-market-cap coins with news in the near future to help you recover your losses. I will take a 30% short-term profit and leave. The next password will be announced soon! !)
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