Bitcoin Pulls Back Ahead of Potential Fed Interest Rate Cut in America

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Latest Prices

The cryptocurrency market has experienced a significant downturn, with the CoinDesk 20 Index (CD20) plummeting by 3.32% to reach 1,822.90.

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MicroStrategy Bags Another 1,070 BTC: The institutional investment firm has continued its efforts to accumulate Bitcoin, purchasing an additional 1,070 units.
Bitcoin (BTC): Trading at $58,779.97, a decline of 1.93% over the past 24 hours.
Ether (ETH): Value decreased by 4.24% to reach $2,302.66.
S&P 500: A minor increase of 0.54% to 5,626.02.
Gold: Prices rose by 1.47% to $2,580.54.
Nikkei 225: Down by 0.68% at 36,581.76.

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Bitcoin’s price has dropped below the $59,000 mark after spending much of the weekend above $60,000. The decline of 2.4% in the European morning marks the beginning of a week where traders worldwide are anticipating the Federal Reserve’s first interest-rate cut in over four years.

Market Analysis

The broader digital asset market has suffered significant losses, with the CoinDesk 20 Index (CD20) plummeting by 3.6%. This downturn can be attributed to favorable U.S. economic data released on Friday, which sparked a short-term rally but ultimately led to the current decline.

Market Performance

Ether: Led losses among major cryptocurrencies, falling by 4.5% in 24 hours.
Cardano’s ADA: Declined by 5%.
Solana’s SOL: Dropped by 4%.
BNB Chain’s BNB: The best performer, slipping only 1.1%.

Futures Traders

Futures traders betting on higher prices have lost over $143 million amid the sudden drop, according to CoinGlass data.

Market Outlook

The widely watched BTC/ETH ratio has fallen to four-year lows, reflecting the increased competition faced by Ethereum as a protocol. The rise of Solana and other chains like Coinbase’s Base and Telegram-affiliated TON has captured more mindshare, likely contributing to the decline in demand for Ethereum’s native token.

Interest-Rate Cut

The Federal Reserve is expected to announce an interest-rate cut on September 18, marking the beginning of the so-called easing cycle. However, traders are split on the size of the cut, setting the stage for potential volatility in financial markets after the decision.

Chart Analysis

A chart provided by Bloomberg and ETC Group illustrates how the last Fed rate-cutting cycle spurred a bitcoin surge to then all-time high levels around $70,000. The recent bull market jump came after the Fed ceased increasing rates, since when BTC has seemingly awaited the next rate-cutting cycle.