FED Interest Rate Cut Hopes Pushed to September! How Will Bitcoin Be Affected? Here Are Analysts' Views!

Question

The Central Bank of the USA (FED), at its meeting on Wednesday, kept the policy interest rate unchanged, in line with expectations. This decision, which aligns with analyst forecasts and CME FedWatch data, caused the markets to turn their attention to September.

Bitcoin Remains Flat: Fed Rate Cut Hopes Shift to September, Seasonal Pressures Continue

Fed Chairman Jerome Powell, in a press conference after the meeting, stated that there is a "downward trend" in inflation.

However, it was noted that there is still room to keep interest rates high due to strong employment and consumer spending.

BRN Chief Analyst Valentin Fournier stated in his assessment, "The Fed has no urgent plan for a rate cut. The 'wait-and-see' approach continues, and it has become clear that the first cut will not be before September."

According to the CME FedWatch tool, the probability of a rate cut at the FOMC meeting on September 17 is priced at 62%.

After the FED's decision, there was no significant movement in the US stock and futures markets. Cryptocurrencies have seen similarly limited price movements. Bitcoin was flat at $105,000, while Ethereum and XRP also failed to find meaningful direction.

Can Demand for Bitcoin Increase?

David Hernandez, Crypto Investment Expert at 21Shares, stated that the Fed's policy stance could create a positive backdrop for Bitcoin. "The slowdown in economic growth and the persistently high course of unemployment increase the pressure of stagflation. In such an environment, the demand for decentralized, limited-supply assets like Bitcoin may increase," he said.

The European Central Bank has cut interest rates eight times since June 2024 and the Swiss National Bank has lowered the interest rate to zero, strengthening the possibility of global liquidity turning to crypto markets. According to Hernandez, "Bitcoin's borderless nature makes it flexible to different central bank policies."

Weak Volume Warning in the Summer Period

On the other hand, seasonal risks are on the agenda for the crypto market in the short term. QCP Capital stated that historically, trading volumes drop in the summer months and that the put-call premium ratio in the Bitcoin options market has increased, indicating that investors are behaving cautiously. Additionally, month-end portfolio rebalancing and the reduction of leveraged trades are also emerging as additional pressure factors.

Summary

The Fed kept interest rates steady, eyes on September for the first cut.
Bitcoin is trading sideways at $105,000.
Institutional analysts predict that BTC demand may increase in a stagflation environment.
Interest rate cuts in Europe and Switzerland increase the prospect of liquidity flows into crypto.
The summer period can be characterized by seasonal stagnation and cautious trading strategies.

In an environment where macroeconomic uncertainties are increasing, Bitcoin continues to attract attention as an alternative safe haven for institutional investors.

*Not investment advice.

Follow our Telegram group, Twitter account, and Youtube channel for exclusive news, analyses, and on-chain data right now! Also, start live price tracking by downloading our Android and IOS applications!