With the upcoming Federal Reserve meeting on August 20, the cryptocurrency market anticipates significant changes due to a potential shift in interest rates.
Signals of a Possible Rate Cut
The Federal Reserve has maintained its interest rate target at 4.25%–4.50%. However, some policymakers are advocating for a 25-basis-point cut. The CME FedWatch Tool shows an 83.1% chance of such a cut.
August Expectations: Volatility and Opportunity
The crypto market has historically been sensitive to Fed policy changes. At the July meeting, when rates were unchanged, Bitcoin quickly jumped above $124,000. If the Fed cuts rates, it may herald a new surge for risk assets, including cryptocurrencies.
Powell’s Speech at Jackson Hole Summit
Fed Chair Jerome Powell’s speech at the Jackson Hole summit is in focus. Traders await hints regarding a potential rate cut in September. However, Powell may emphasize concerns over inflation data not aligning with the 2% target.
The cryptocurrency market remains under pressure from expectations regarding the Fed's rate decision, with volatility being a key feature amid potential economic policy changes.
