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FED’s rate reduction The expectation for September fell by 20% when traders reduced their earlier bullish prospects. Will the high non -realized profit delay the BTC Bull Run?
Bitcoin [BTC] Short dropped to $ 115.7k after the Havel -like tone of FED chairman Jerome Powell after keeping the interest rates stable on July 30.
While the decision was expected, his cautious prospects and a ‘wait-and-see’ approach for a September led a further risk-off step. Powell called the inflation risk of rates and noted”
“For the time being we are well positioned to learn more about the likely course of the economy and the evolving balance of risks before we adjust our policy position.”
The market quickly completed the expectations of September after its statement.
Fed Rate Reducings expectations Dip Dip
Source: CME Fed Watch Tool
Before the FED rate of July, the chance of reducing the reductions of September was more than 63%.
Against the press, the chance of a cut of 25 BPS drop To 43%, while another steadily percentage (4.25%-4.50%) expectation increased to 57%.
In most cases, a looser interest rate policy always increases risk activa such as shares and crypto, Matt Mena, crypto strategist in 21shares, Am AmbcRYPTO said.
He added,
“For Crypto, a fed Pivot could serve as an important in the rugwind. Losser financial circumstances and interest rates have historically fed Risk activa such as Bitcoin, which has long worn as a sponge for surplus liquidity.”
However, the cautious attitude of the Fed can slow down the ongoing bull run. But Mena noted that all conditions were set for a likely Dovish Pivot,
“The setup is more and more like Q4 2023 – soothing inflation, rising political volatility and a FED that is limited by lagging indicators, who saw Bitcoin ending the following year at $ 100k. The stage is set for a policy spivot. The only question is when.”
At the time of the press, however, BTC bounced back to $ 118.5k by 2%, but most Altcoins did not follow prior to inflation data (PCE index).
Source: BTC/USDT, TradingView
According to Mena, BTC, if the $ 114k $ 115k supports, can go lower to $ 110k.
Another risk factor for the Marktrally was rising BTC profit.
Glass node marked Those BTC’s not -realized profit reached a record high of $ 1.4 trillion, and the relative non -realized profit hit levels activated beyond the ATH conditions and were sold.
Source: Glassnode
But crypto -analysis company Swissblock kept That the BTC rally could go higher when QE (quantitative relaxation) or an increase in dollar starts.
Source: Swissblock
In the short term, the macrodruk Can hold BTC under $ 120k and make a profit. However, any potential fed up with the medium term can cause a rebound.