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Share link:In this post: The Federal Reserve will decide on interest rates on July 31. Bitcoin’s price rose in July after weakness from mid-June to early July. 93% of Bitcoin holders are currently profitable, and a Fed rate cut could further boost Bitcoin’s price.Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualifi
The US Federal Reserve will meet on July 30 and July 31 to decide on interest rates. Bitcoin hit its highest price level after mid-June, and a potential rate cut could make it rise further. Analysts expect the FOMC to either undertake a surprise rate cut now or wait until September.
The Federal Open Market Committee may likely keep its main interest rate at 5.25-5.5% at the end of July 31. In this case, analysts believe that the Fed will cut rates by 0.25% in September. However, the first-rate cut of 2024 could also come as soon as this week, as some analysts note that the inflationary rise of Q1 was a mere seasonal adjustment.
FOMC could cut interest rates as inflation lowers
Crypto journalist Colin Wu cited CME data, noting that there is a 96% chance the rate will stay the same. Contrarily, he notes that there is an 85.8% chance of a 0.25% rate cut in September. Roger Ferguson, former Fed Vice Chair, agreed, telling CNBC, “Count me in the camp of many that September is likely the first move.”
Chief Market Strategist at Creative Planning, Charlie Bilello, is betting on a hold on July 31, 2024, followed by a quarter cut on September 18. According to the market strategist, further cuts might be announced in November to bring the rate to 4.75-5.00%.
Notably, the interest rate stood at 5.25% at this time last year. Bilello sees rates coming down to 4.50-4.75% later in December. In addition, he projects another brief hold in January 2025, with a final cut likely to be announced in March that will bring the interest rate in the range of 4.25-4.50%.
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“The Fed is moving closer to a rate cut, and its communications this week should reflect that,” Brian Sack, a former official with the New York Fed’s Markets Group told the Financial Times. The rate cut will matter for Bitcoin investors as they will look for other places to invest their money.
Bitcoin price rises after a month of weakness
Bitcoin’s price has been on the rise in July, partly because of hopes for lower interest rates. Another reason is Donald Trump’s BTC endorsement ahead of the US Elections due in November as the top crypto by market cap closes on $70K. This follows a price weakness in mid-June and early July when the price dipped below the crucial support of $55K.
Bitfinex analysts recently noted that the past weeks haveseen a rapid decrease in the Bitcoin Exchange Reserve. They said, “A decline in exchange reserves typically indicates that investors are withdrawing their holdings for long-term storage rather than selling.” The analysts explain that large investors are buying the dip and moving their assets off exchanges for accumulation.
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