Hold onto your hats, crypto enthusiasts! Bitcoin has taken a tumble, dipping to $62,500 after hitting a wall at $64,000. Just a few days ago, it looked like BTC was on a joyride, especially after the US Federal Reserve hinted at more rate cuts.
Back in mid-September, Bitcoin got a major boost when the Fed announced its first interest rate cut in over four years. Excitement was in the air, and many thought Monday's speech by Fed Chair Jerome Powell would send BTC soaring again. Spoiler alert: it didn’t.
So, why didn't BTC skyrocket despite Powell's hints at more rate cuts? Let’s rewind to late August when Powell suggested that the Fed should follow the lead of other central banks like the ECB and Bank of England and lower interest rates. Bitcoin, known for its wild reactions to macroeconomic news, shot up immediately.
But then, BTC hit a rough patch. From over $65,000, it nosedived to under $53,000 by September 7, as everyone braced for the Fed’s actual rate cut. Finally, on September 18, the Fed slashed rates by 50 basis points—the first since 2020. Bitcoin briefly soared from $59,000 to $66,500, but it couldn’t keep up the momentum.
Fast forward to yesterday, all eyes were on Powell again as he spoke about the Fed’s monetary policy in Nashville, Tennessee. He suggested that the Fed might cut rates two more times this year. Sounds like good news for BTC, right? Nope. Instead of rallying, Bitcoin slipped by over 2% in the past 24 hours, settling at $62,500.
Some industry experts had warned us. Arthur Hayes had predicted that the rate cut could ‘cripple’ the crypto market in the short term. Bitfinex’s research team even suggested BTC could plummet to $45,000 after the Fed’s moves.
So, buckle up, crypto fans! The ride is far from over, and Bitcoin’s next move is anyone’s guess. Stay tuned!
