Bitcoin’s price has fallen since yesterday. However, one event could cause everything to change 180 degrees. And in just a few days.
Bitcoin price drops, yes, again…
The bitcoin price has fallen again. Today, one bitcoin is worth just over $58,300. The cryptocurrency has fallen below the $60,000 mark. This translates into a 4.5% drop since yesterday. If someone bought bitcoin a week ago, during Monday’s crash, they are still “in the black” – by 11%.
The drop immediately worsened market sentiment. The Bitcoin Fear and Greed Index is 25, which translates to extreme fear.
Ether is currently trading at around $2,600. This represents a 3.2% drop in price since yesterday and a 12% increase in 7 days. The ETH Fear and Greed Index has fallen to 30, which indicates fear.
The market is waiting for data from the US
Markets are waiting for new inflation data from the US. These will be released on Monday. Why is it important? For a simple reason: if inflation in the US falls, the Fed will have another, possibly final, reason to start a cycle of interest rate cuts. What’s more, the decline in the scale of growth in the prices of products and services may prompt the central bank to start easing with a really big momentum – not with a cut of 25, but 50 basis points (bp).
Look at the Fed Watch Tool data. The chart below clearly shows that the probability of interest rates remaining in the current range (5.25-5.5%) is… 0%. The market is pricing a 50bp cut at 50.5%, and a 25bp cut at 49.5%. These results are constantly changing, but it is doubtful that a drastic change will occur by September 18 (the day of the Fed’s meeting). This is only possible if it turns out that inflation has started to rise strongly.
Remember that the latest unemployment figures in the US (a jump from 4.1 to 4.3%) are rather encouraging the Fed to cut. Of course, we will wait for the final decision until the second half of September.
