September rate cut "horn" sounds? BTC falls instead of rising
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September rate cut "horn" sounds? BTC falls instead of rising
But as U.S. national debt recently surpassed $35 trillion with no signs of slowing, the performance of both bitcoin and gold could differ from previous bull cycles.
Navigating Web3 tides with focused insightsBy Mary Liu, Bitpush News
On Wednesday, the Federal Reserve announced it would hold interest rates steady, in line with market expectations. U.S. equities rose in afternoon trading, as comments from Fed Chair Jerome Powell laid the groundwork for a potential rate cut in September, boosting market confidence.
While Powell stated that the Fed "has not made any decisions about future meetings, including the September meeting," he noted: "The committee's overall view is that the economy is approaching a level suitable for reducing policy rates."
Powell said the decision to cut rates would depend on inflation declining or meeting expectations, economic growth remaining relatively strong, and the labor market maintaining its current condition. If these criteria are met, "a rate cut in September could be on the table."
According to CME FedWatch data, traders are pricing in a 90.5% probability of a 25-basis-point rate cut in September and a 9.5% chance of a 50-basis-point reduction.
Markets reacted positively to Powell’s remarks. At closing, the S&P 500, Dow Jones, and Nasdaq indices all rose by 1.58%, 0.24%, and 2.64%, respectively.
The crypto market, however, moved in the opposite direction. Bitpush data showed Bitcoin rising to $66,830 following Powell’s comments but facing strong resistance from bears, pulling back to the $64,500 support level. BTC was down over 2% in the past 24 hours. At the time of writing, BTC was trading at $64,643, down 2.5% over 24 hours.
Altcoins struggled to maintain recent gains, with the majority of the top 200 cryptocurrencies by market cap posting losses on Wednesday.
Among gainers, Centrifuge (CFG) led with a 9.3% increase, trading at $0.482, followed by cat in a dogs world (MEW) up 8.3%, and Beam (BEAM) up 6.8%. JasmyCoin (JASMY) saw the largest drop, falling 7%, while AIOZ Network (AIOZ) and Book of Meme (BOME) declined 5.4% each.
The total cryptocurrency market capitalization currently stands at $2.36 trillion, with Bitcoin’s market dominance at 54.8%.
Gold, Fed Monetary Policy, and BTC Correlation
Jag Kooner, Head of Derivatives at Bitfinex, said in a report: "A rate cut in September would generate bullish sentiment and could generally increase market liquidity, benefiting Bitcoin and other cryptocurrencies as investors seek higher returns beyond traditional assets. This could put upward pressure on Bitcoin prices and boost ETF inflows as investors look to capitalize on a more favorable environment for risk assets."
Kooner added: "Market confidence is currently strong—potential negative catalysts such as Mt. Gox repayments, German government sell-offs, and various significant on-chain developments have failed to exert meaningful downward pressure on Bitcoin’s price."
Market analyst CryptoCon emphasized the correlation between BTC and gold as a potential indicator.
CryptoCon posted on X: "Bitcoin bull markets begin where gold bear markets start. It has been 208 weeks since the peak of the last gold bear market; previous bear markets were triggered at 196 weeks and 213 weeks. A major reversal and bull run for Bitcoin may be near."
CryptoCon’s chart illustrates Bitcoin’s historical tendency to rise as gold prices fall, though there have also been periods when both assets rose together—such as in 2020, which coincided with the Fed’s last rate cuts in response to the pandemic.
Given widespread expectations that the Fed will resume rate cuts in September, both assets could rise simultaneously again. According to CryptoCon’s analysis, once gold prices reach a peak and begin to decline, crypto traders should watch for an explosive move in Bitcoin.
However, with U.S. national debt recently surpassing $35 trillion and showing no signs of slowing, the performance of both Bitcoin and gold could diverge from prior bull cycles.
Analysts at wavetraders.com believe Bitcoin will catch up to gold in the short term, as BTC has remained stagnant over recent months while gold has reached new all-time highs.
Prominent crypto analyst Captain Faibik emphasized that although Bitcoin is currently consolidating at support levels, the next key area to watch is around $60,000. He noted on X: "The daily MA128 ($65,200) is now critical support. Bulls need to defend it, otherwise Bitcoin could retest the $60,000 support zone."
Secure Digital Markets analysts observed: "BTC is currently in a defensive mode, while the Japanese yen strengthens in foreign exchange markets due to the Bank of Japan's rate hikes and tightening liquidity measures. With major U.S. tech companies reporting earnings this week, traders are bracing for further volatility."
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