Bitcoin Surges to $115,000 Amid Positive Fed Rate Cut Expectations
Bitcoin reached beyond $115,000 last week due to anticipation of the Federal Reserve cutting interest rates and critically important inflows into exchanges. As of Sunday, September 14, the cryptocurrency experienced a slight decline of 0.5%, based on CoinGecko data.
The focal macro event this week revolves around the Federal Open Market Committee’s decision on Wednesday. Expectations point towards a reduction of 0.25%. Financial tools, including the CME FedWatch and predictive markets, unanimously agree wiht this projection.
historically, cryptocurrencies thrive during periods of low-interest rates but falter under tightening monetary policies. CoinBase insights indicate that Bitcoin has seen the highest performance in the fourth quarters since 2013.
- Economists expect a 0.25% interest rate cut from the Federal Reserve.
- This scenario typically bodes well for cryptocurrencies.
- Historical data shows Q4 as the peak performance period for Bitcoin.
Despite this bullish outlook, there are risks looming.A primary concern arises if the market has already factored in the expected move. A hawkish statement could result in a sell-off. Additionally, technical analysis reveals a rising wedge pattern in Bitcoin’s price chart, hinting at possible instability.
Others technical indicators, such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), suggest a bearish divergence. Thes factors paint a complex picture for Bitcoin’s near future, suggesting that although the Fed rate cut favors Bitcoin, a short-term downturn might still occur.
