When Will the Fed Start Cutting Rates? Effects on Bitcoin!

• Last week, while Bitcoin (BTC) consolidated around $35,000, altcoins led a weekend rally in the crypto market.
• Bitcoin’s next block reward halving is expected around April 2024, which could add more fuel to the Bitcoin price rally.
• According to the CME FedWatch tool, the likelihood of the Fed lowering its key interest rate by 25 basis points below current levels at the March meeting increased to 25.9% on Friday.

FED announced last week that it will continue to keep interest rates steady; when will the Fed cut rates? Effects on Bitcoin!

When Can the Fed Start Cutting Rates?

Last week, while Bitcoin (BTC) consolidated around $35,000, altcoins led a weekend rally in the crypto market. Last week, the U.S. announced lower-than-expected employment figures for October 2023. Consequently, analysts became more optimistic about the Fed making a rotation earlier than expected as we enter 2024.

Some analysts are beginning to see a high likelihood of interest rates being cut for the first time in March 2024. If so, this could mean a significant rally in risky assets like stocks and cryptocurrencies. Interestingly, Bitcoin’s next block reward halving is expected around April 2024, which could add more fuel to the Bitcoin price rally.

According to the CME FedWatch tool, the likelihood of the Fed lowering its key interest rate by 25 basis points below current levels at the March meeting increased to 25.9% on Friday, compared to 12.9% on Thursday. Fed funds futures show a 66.5% chance that interest rates will remain unchanged during the March meeting.

The probability of staying at current levels is 95.4% for the December meeting and 89.4% for the January meeting. The probability of an interest rate cut in both meetings is zero, but there is a 10.3% chance of an interest rate hike in January. Charlie Ripley, senior investment strategist at Allianz Investment Management, said:

“Overall, the employment report may mark a turning point in the U.S. economy, but more importantly, the data shows that monetary policy is working and should reduce the debate about whether policy is restrictive enough.”

Bitcoin Price Rally Could Start Soon

While Bitcoin has been consolidating around the $35,000 level for a long time, this calm before the next mega Bitcoin price rally could be significant. Popular crypto analyst Ali Martinez reported a milestone where more than 700,000 new BTC addresses were created in a day. This growth in the BTC network is often considered one of the most reliable indicators for price predictions.

While Bitcoin maintains short-term positive momentum, CrediBull Crypto expresses optimism that the asset can continue to shift gears until it reaches the psychologically important $40,000 threshold. The analyst anticipates that if this happens, a potential journey towards a new All-Time High (ATH) could be very close.