Bitcoin drops to $63k after Fed hints at future interest rate cuts
Bitcoin opened the week trading at $63,000, the intraday trend unaffected by US Federal Reserve Chairman Jerome Powell's announcement that further rate cuts are part of the Fed's plan. Despite the correction, Bitcoin price remains on track to close Q3 with positive returns.
On September 30, Bitcoin (BTC) fell from a high of $65,634, down roughly 4% to an intraday low of $63,049, according to Cointelegraph Markets Pro and TradingView. At the time of publication, the price of Bitcoin was trading at $63,344, down 3.6% in the last 24 hours.
BTC/USD Hourly Chart. Source: TradingView
Following a speech at the National Association of Business Economics in Nashville, Powell said the upcoming rate cut would not be as drastic as the recent 50-basis-point cut.
The chairman of the Fed explained that if the economy moves as expected, the markets should expect two more rate cuts in 2024, but they will be 0.25% increases.
“This is not a committee that seems to be in a rush to cut rates too quickly.”
“Looking forward, if the economy improves broadly as expected, policy will move toward a more neutral stance.” But we are not on any preparatory course. The risks are two-sided, and we will continue to communicate our decisions,” Powell added.
Powell's comments came less than two weeks after the Federal Open Market Committee (FOMC) cut interest rates by 50 basis points, the first since March 2020.
Future market forecasts indicate that the Fed is more likely to move cautiously and approve a quarter-point rate cut at its next meeting in November. However, traders see the December movement as more aggressive. Data from CME Group's FedWatch Tool put the odds of a 0.5% cut at the Dec. 18 FOMC meeting at around 48%.
Target rate possibilities for the November 7 FOMC meeting. Source: CME Group
Before the comments, markets expect the FOMC to cut interest rates by 0.5% at the next meeting.
RELATED: Bitcoin price tumbles as global recession and AI bubble fears scare investors
Bitcoin traders still expect a bullish Q4
Powell's comments came after major cryptocurrencies posted a third straight week of gains. Bitcoin had a rough start to what has historically been the most brutal month for BTC, falling 11% between September 1st and September 6th. However, rates rebounded after the Fed cut interest rates by 50 basis points after the FOMC meeting in September. 18.
According to data from CoinGlass, Bitcoin is on track to finish Q3 up 0.6% in September and 7% higher.
Bitcoin quarterly and monthly returns. Source: CoinGlass
“Election years have had 100% green October, November and December,” Werett founder Quintin Francois said in a September 30 post.
“With a green September, 100% of years had a green October, November and December. Q4 starts tomorrow.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
