Oct 9 2024: Bitcoin’s price remained relatively unchanged on Wednesday, stabilizing after recent declines as traders awaited new insights on U.S. interest rates from the Federal Reserve and upcoming inflation data.
The cryptocurrency rally stalled earlier this week as expectations for slower interest rate cuts by the Fed impacted sentiment. A stronger U.S. dollar also weighed on the broader crypto market, contributing to reduced risk appetite.
As of 01:50 ET (05:50 GMT), Bitcoin slipped just 0.1%, trading at $62,466.2.
Focus on Fed Minutes and Inflation Data Traders are now keenly awaiting the release of the Fed’s September meeting minutes, scheduled for later Wednesday, for further indications on interest rates. In September, the Fed reduced rates by 50 basis points, signaling the start of a new easing cycle.
However, stronger-than-expected U.S. payroll data last week raised doubts about how aggressively the Fed will continue cutting rates. Current market estimates show an 84.1% likelihood of a 25 bps rate cut in November, with a 15.9% chance of no change, according to CME’s FedWatch.
Inflation data, set to be released Thursday, is another critical factor as the Fed has signaled that its future rate cut decisions will be influenced by inflation trends and the labor market.
Lower interest rates typically benefit speculative assets like cryptocurrencies, but if the pace of rate cuts slows, crypto traders may remain cautious in the short term. Additionally, a higher terminal rate for the U.S. could dampen sentiment in the crypto sector.
Bitcoin Rangebound Despite Market Movements Despite market volatility, Bitcoin has largely remained in a trading range between $50,000 and $65,000 since June. Traders are now looking for new catalysts to drive prices higher, with one potential trigger being the launch of options trading for BlackRock’s spot Bitcoin ETF.
Bitcoin lagged behind a stock market rally following the Fed’s September rate cut and faced further pressure from risk aversion last week as concerns about the Israel-Hamas conflict grew.
One factor supporting crypto prices is the potential for a Donald Trump victory in the 2024 U.S. presidential elections. According to the crypto betting platform Polymarket, Trump leads Vice President Kamala Harris by 53.4% to 45.9%. Trump has consistently voiced support for cryptocurrencies in recent campaign statements.
Altcoins Follow Bitcoin’s Trend Other cryptocurrencies also saw muted price movements. Ether, the second-largest crypto, edged up 0.9% to $2,450.46. Smaller altcoins like SOL, XRP, ADA, and MATIC saw slight increases, while meme token DOGE gained 1.2%.
