Key Takeaways
- Bitcoin prices fell to a two-week low, despite the Fed's dovish stance.
- The Fed has kept rates unchanged but hinted at a potential cut in September.
- Traders see potential for Bitcoin price volatility due to market conditions.
Bitcoin Struggles After Fed Meeting
Bitcoin’s price remained under pressure on August 1, despite the Federal Reserve’s dovish stance. The Fed decided to keep interest rates unchanged, with Chair Jerome Powell suggesting a potential rate cut at the next meeting in September. However, this did not provide the expected boost to Bitcoin, which dropped 2.4% the previous day.
Market Reacts to Fed’s Dovish Tone
Despite Powell’s indication that the Fed could cut rates if inflation continues to move towards 2%, Bitcoin remained weak. The market had already priced in a 100% probability of a 0.25% rate cut in September, according to the CME Group’s FedWatch Tool. While US equities responded positively, Bitcoin saw little impact, hitting a local low of $63,400, its lowest since July 19.
Trader Perspectives on BTC Movements
Popular trader Crypto Chase noted that the current liquidity sweeps were not yielding expected results, expressing caution about Bitcoin’s next move. Crypto Chase shared that,
Historically, liquidity sweeps fail if they’ve been endlessly frontrun.
Meanwhile, another trader, CrypNuevo, saw potential for a short squeeze due to the liquidation levels being above the current spot price.
Crypto Markets Remain Uncertain
QCP Capital highlighted that the crypto market remains edgy, with traders closely monitoring the newly launched US spot Ether ETFs and potential selling pressures from Mt. Gox and US government holdings. The firm noted that ongoing discussions among US presidential candidates about a sovereign Bitcoin reserve could impact the market in the future, potentially stabilizing Bitcoin prices.
