Aug 1 2024: On Thursday, Bitcoin’s price declined, continuing its recent downtrend and finding little support from a Wall Street rally after the Federal Reserve suggested a possible interest rate cut in September.
The crypto market sentiment was largely hampered by concerns over a potential mass sale by the U.S. government, which reportedly mobilized about $2 billion worth of Bitcoin earlier this week.
Hopes for a boost from crypto-positive promises by Republican presidential nominee Donald Trump faded after a Bloomberg poll showed Democratic frontrunner Kamala Harris erasing Trump’s lead in seven key battleground states.
Bitcoin dropped 2.9% over the past 24 hours to $64,256.2 by 02:01 ET, hitting a low of $63,599.5 earlier in the day.
Fed Mentions Rate Cuts, but Bitcoin Remains Stagnant
The Federal Reserve maintained interest rates as expected on Wednesday, with Chair Jerome Powell highlighting progress in reducing inflation and a softening labor market. Powell explicitly mentioned the possibility of a rate cut in September, pending favorable data, which sparked a strong rally on Wall Street.
Optimism surrounding the Fed, along with positive earnings from the tech sector, kept traders focused on equities, even though lower U.S. interest rates typically benefit the speculative nature of cryptocurrencies.
While crypto markets generally perform well in low-rate environments due to increased liquidity, risk appetite outside the U.S. was less robust. Japanese markets fell following the Bank of Japan’s interest rate hike and indication of further increases, strengthening the yen and pushing Bitcoin to a near three-week low against the currency. Geopolitical tensions in the Middle East, following the killing of a Hamas leader in Iran, also dampened risk sentiment.
Crypto Prices Today: XRP Rally Stalls, Altcoins Decline
Broader crypto markets mirrored Bitcoin’s decline, with XRP dropping 5.7% as it reversed from a recent rally spurred by unfounded rumors of a settlement between Ripple, the issuer of XRP, and the Securities and Exchange Commission over a long-standing lawsuit.
Ether, the world’s second-largest cryptocurrency, fell 3.7% to $3,179.26 per ounce, while SOL and ADA lost 6.9% and 5.1%, respectively.
Among meme tokens, DOGE declined by 3.9%.
