- Bitcoin’s price remains low despite Fed’s dovish stance; no rate change influences BTC.
- Bitcoin drops to $63,400, marking its lowest level since July 19 amid market uncertainty.
Despite the Federal Reserve’s dovish stance, Bitcoin’s price failed to rally, tapping a two-week low as market liquidity remained a primary concern for traders.
The recent Federal Open Market Committee (FOMC) meeting concluded with the decision to maintain interest rates, with Fed Chair Jerome Powell suggesting a potential rate cut in September dependent on favorable inflation data.
“The second-quarter’s inflation readings have added to our confidence, and more good data would further strengthen that confidence. We will continue to make our decisions meeting by meeting.”
Bitcoin, typically sensitive to Fed’s monetary policies, displayed unusual indifference following the meeting. The price of Bitcoin fell to $63,400, its lowest point since July 19, reflecting a persistent weakness despite the crypto market’s anticipation of a rate cut.
This disconnect highlights the current complexities in cryptocurrency market, where even a dovish Fed does not necessarily translate to bullish crypto movements.
Crypto analysts on X expressed skepticism about the immediate future of Bitcoin prices.
$BTC update:
Are we going to see the weekly psychological pattern playing out again?
We also see a lot of delta short liquidations signaling a potential short squeze before the weekend.
• Become an active trader here to receive access to the indicator: https://t.co/vp3GHIeNxB pic.twitter.com/7Ft0Nfhb7C
— CrypNuevo 🔨 (@CrypNuevo) August 1, 2024
One trader suggested that Bitcoin might drop further, estimating potential lows between $61,000 and $59,000, depending on market confidence levels.
This cautious outlook underlines the ongoing uncertainty and speculative nature prevalent in the crypto trading community.
In contrast, equities responded positively to the Fed’s announcements, underscoring a divergence in how traditional and digital asset markets react to economic signals.
This separation suggests that factors specific to the cryptocurrency market—such as liquidity concerns and regulatory developments—might be exerting a stronger influence on crypto prices than broad economic policies.
Moreover, the broader crypto market remains tense, with traders closely monitoring daily outflows from newly launched US spot Ether ETFs and potential sell pressures from ongoing financial events like the Mt. Gox repayments and US government actions.
“The establishment of a U.S. or sovereign ‘put’ on BTC prices may have significant implications, potentially making accumulation on dips a strategic investment approach.”
The complex interplay of these factors continues to shape market sentiment, keeping traders on edge.
The possibility of a U.S. government-supported price floor for Bitcoin may redefine investment strategies, potentially encouraging buying during price dips as a strategic move.
