Bitcoin Drops Below $60,000 Ahead of Expected Fed Rate Cut

ChainCatcher reports that Bitcoin has fallen below the $60,000 mark, ahead of widespread expectations that the Federal Reserve will cut interest rates later this week. The upcoming policy shift from the Fed has created nervous anticipation in global markets.

The first US interest rate cut in over four years signals a looser monetary environment, which typically provides a favorable backdrop for riskier assets like cryptocurrencies. However, investors remain uncertain about the magnitude of Wednesday's rate cut, and how the market will respond to the latest projections from Fed officials (the so-called dot plot) and Chairman Powell's briefing.

Bitcoin prices surged 10% in the seven days leading up to last Sunday, marking the largest single-week gain since July, potentially reflecting increased bets on a 50 basis point Fed rate cut.

Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for digital asset derivatives trading, stated that "the pricing weight on the Fed meeting is significantly larger than we've seen recently" in the Bitcoin options market.

Arguably, the monetary policy outlook has become the dominant factor driving Bitcoin's short-term movement, overshadowing (at least for now) the impact of the US presidential election. (Bloomberg)