Bitcoin and Crypto Markets Dip Ahead of Interest Rate Data
Crypto investors were focused on the US Federal Reserve’s annual meeting in Jackson Hole on Friday, where remarks from Chair Jerome Powell were expected to offer direction on interest rate policy ahead of September’s FOMC meeting.
Bitcoin briefly dropped to $112,565 on Wednesday, its lowest point in two weeks. The dip below $113,000 reflected “rising nerves in the market” as Powell’s speech fueled “fear spikes” among traders, said Ryan Lee, chief analyst at Bitget.
“Now, letting the narratives settle and liquidity return might pave the way for a rebound,” he told Cointelegraph, noting that if $112,000 support holds through the speech, it could set up “the next leg of the bull run rather than a reset.”
Fed policy signals weigh on Bitcoin
Concerns grew after the US Consumer Price Index showed a 2.7% year-over-year increase in August, unchanged from June but above the Fed’s 2% target. Following the report, expectations for a September interest rate cut dropped from more than 94% to 82%, based on CME Group’s FedWatch tool.
André Dragosch, head of European research at Bitwise, said, “The moment you see further rate cuts by the Fed, the curve will steepen, which implies even more acceleration and US money supply growth,” adding that these cuts may be the most important macro factor to “support” Bitcoin’s rally “at least until the end of the year.”
Corporations keep buying Bitcoin despite market jitters
Despite retail sentiment becoming more cautious, corporate interest in Bitcoin remained strong. Data from BitcoinTreasuries.NET showed at least 297 public entities now hold Bitcoin, up from 124 in early June.
This group includes 169 public companies, 57 private firms, 44 investment and ETF funds, and 12 governments, collectively holding about 3.67 million BTC, representing over 17% of the total supply.
Sources:
https://cointelegraph.com/news/bitcoin-dips-fed-powell-speech
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html