- The crypto market witnessed a significant dip as Bitcoin price plunged below $60,000, hitting a low of $58,112.
- The ongoing US Fed monetary policy decisions are poised to shape the course of both stock and crypto markets.
- A notable event was the reported assassination attempt on Donald Trump, adding to the political turbulence influencing market dynamics.
Bitcoin’s recent price drop, coupled with heightened political and monetary uncertainties, leaves investors on edge about the future prospects of the crypto market.
Bitcoin Price Decline Amid Political Unrest
In an unexpected turn of events, Bitcoin’s price plummeted below the $60,000 mark, landing at a notable low of $58,112. This decline has left the crypto community on edge, especially given the speculative rally spurred by anticipated 50 basis points (bps) rate cuts by the Federal Reserve. The political climate, marked by another assassination attempt on Donald Trump near his Florida golf course, adds to the existing volatility. The Secret Service is currently investigating the incident, and the market reaction underscores the sensitivity to political developments.
The Ripple Effect of Political Events
The impact of political occurrences on market sentiments cannot be underestimated. In July, Bitcoin saw a surge following an assassination attempt on Donald Trump in Pennsylvania, which seemingly boosted his odds against incumbent President Joe Biden. As the 2024 US presidential election draws closer, the fluctuating fortunes of candidates like Trump and Kamala Harris continue to inject uncertainty into the market. While Trump was unharmed in the latest incident, cryptocurrencies closely linked to him, such as MAGA, TRUMP, and TREMP, experienced sharp declines.
Anticipation of US Fed Rate Cuts
With the next Federal Open Market Committee (FOMC) meeting set to announce new monetary policies on September 18, the market is on tenterhooks. Federal Reserve Chair Jerome Powell’s statement post-meeting is highly awaited for clues on the market’s direction for the next quarter. The anticipation of a significant 50 bps rate cut is fueling market activity. According to the CME FedWatch Tool, there’s currently a 61% chance of a 50 bps rate cut, while a 25 bps cut holds 39% probability. Predictively, a 125 bps total rate cut within the year is on the cards, potentially triggering a substantial Bitcoin price rally.
Market Strategists’ Outlook
Expert insights, such as those from Jim Reid of Deutsche Bank, highlight the critical nature of the Fed’s first rate cut magnitude. Deutsche Bank anticipates a cumulative 75 bps rate cut throughout the year if the initial cut is 25 bps. In contrast, a 50 bps initial cut could amplify market volatility and stimulate significant activity in Bitcoin and other crypto markets. Additionally, uncertainties loom over the Bank of Japan’s expected rate hike in October, adding another layer of complexity to the market outlook.
Short-term Bitcoin Price Forecast
Bitcoin’s recent decline to $58,112 has rattled traders, particularly as it breached the 50-day Simple Moving Average (SMA). Analysts from 10X Research caution that Bitcoin must break above the triangle resistance line to initiate a new rally. Currently, Bitcoin is oscillating between the 0.5 and 0.618 Fibonacci retracement levels on the daily chart, hovering around the $59,000 zone. This lateral movement is likely to persist until more clarity emerges from the Fed meeting.
Conclusion
The crypto market is navigating through a labyrinth of political drama and monetary policy uncertainties. The assassination attempt on Donald Trump and the forthcoming Federal Reserve decisions are pivotal events shaping market movements. For investors, a cautious approach is advised as the market adjusts to these dynamic developments. Keeping a close watch on key technical levels for Bitcoin and staying updated with macroeconomic cues will be essential for informed trading decisions.
