Bitcoin Surges Above $61,000 After Fed Minutes Fuel Rate Cut Speculation
Bitcoin Surges – Bitcoin (BTC) has rebounded above the $61,000 mark following the release of the Federal Open Market Committee (FOMC) meeting minutes for July. The minutes, released on Wednesday, revealed a dovish stance that has contributed to a positive shift in investor sentiment. Bitcoin’s price had been trading within a narrow range of $59,900 to $61,000 prior to this event.
Price Movement and Market Reaction
After the dovish FOMC minutes were published at 2:00 p.m. ET on Wednesday, Bitcoin’s price climbed steadily and briefly touched $62,000. Although it has since retreated to hover above $61,000, the cryptocurrency remains above the critical support level. This rebound reflects increased optimism in the market.
Funding Rate Shift and Investor Sentiment
The Bitcoin perpetual futures funding rate has turned positive, signaling a more optimistic outlook among investors. This shift indicates that traders are becoming more bullish, anticipating further price gains.
Increased Likelihood of Rate Cuts in September
The July FOMC minutes have been interpreted as supportive of a potential rate cut in September. The summary stated, “The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.” According to the CME FedWatch Tool, there is now a 67.5% probability of a 25 basis point cut and a 32.5% chance of a 50 basis point cut at the upcoming meeting. Lower interest rates are expected to make risk assets, including cryptocurrencies, more attractive by reducing borrowing costs and encouraging investment.
Factors Behind the Cryptocurrency Market Rebound
Presto Research analyst Peter Chung highlighted several factors contributing to the recent rebound in the cryptocurrency market. In addition to the dovish FOMC minutes, Chung noted the impact of revised employment figures from the U.S. Labor Department, which suggested increased economic fragility. “A record downward revision in payroll and the dovish FOMC minutes last night triggered a rally across risk assets,” Chung explained. He added, “The yield curve steepened, the DXY is now down, and small caps and Bitcoin are up.”
Political Developments and Market Sentiment
Chung also referenced a recent ABC report indicating that Robert F. Kennedy Jr. plans to withdraw from the 2024 presidential race and endorse Donald Trump. Both candidates are known for their pro-crypto stances. “Topping up the positive sentiment was the news that Robert Kennedy Jr. is likely to drop out and endorse Trump instead, further helping his winning odds,” Chung added.
FAQ
Why has Bitcoin’s price recently rebounded above $61,000?
Bitcoin’s price rebounded above $61,000 following the release of dovish Federal Open Market Committee (FOMC) meeting minutes for July. The minutes suggested a possible rate cut by the Federal Reserve, which boosted investor sentiment and optimism in the market.
What impact did the FOMC meeting minutes have on Bitcoin’s price?
The FOMC meeting minutes indicated a potential rate cut in September, which led to a positive shift in Bitcoin’s price. The minutes revealed that if data continues to align with expectations, it would be appropriate to ease policy at the next meeting, contributing to Bitcoin’s rise.
What is the current status of the Bitcoin perpetual futures funding rate?
The Bitcoin perpetual futures funding rate has turned positive, reflecting a more optimistic investor outlook. This shift suggests that investors are currently more bullish on Bitcoin.
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