Bitcoin started the week with a decline as markets prepare for the Federal Reserve's expected rate cut, which could impact the cryptocurrency market.
Current Market Situation
BTC price has lost approximately 3.70% of its value during the day and is trading at $57,800 at the time of writing.
Impact of Fed Rate Cut
The first Fed rate cut in more than four years potentially signals looser financial conditions, which could benefit riskier assets like cryptocurrencies. However, investor sentiment remains cautious amid uncertainty over the size of the rate cut and how markets will react to Fed officials’ updated economic projections, known as dot plots, and Fed Chair Jerome Powell’s briefing on Wednesday.
Expert Opinions
Traders in the bitcoin options market are bracing for a significant shift in response to the Fed meeting. According to Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets, traders are “pricing in a significantly greater event weight than we’ve seen recently,” reflecting the heightened anticipation surrounding the Fed’s policy change.
The anticipated Fed rate cut creates tension in the market, which could affect the dynamics of Bitcoin and other cryptocurrencies in the coming days.
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