Bitcoin has dropped below $64,000, influenced by the U.S. Federal Reserve's recent decision to maintain current interest rates and escalating conflicts in the Middle East.
Bitcoin has dropped below $64,000, influenced by the U.S. Federal Reserve's recent decision to maintain current interest rates and escalating conflicts in the Middle East. According to CoinMarketCap, BTC fell below the $64,000 level. Although it briefly rebounded to $65,075, it quickly retreated and is now trading at $63,985.
This price movement followed the Federal Open Market Committee's (FOMC) decision to keep interest rates steady at 5.25% to 5.5%, a move widely anticipated by the market. Federal Reserve Chair Jerome Powell commented that the economy is growing at a "solid pace," with promising indicators for GDP growth and Private Domestic Final Purchases (PDFP). However, he noted a slowdown in consumer spending, which aligns with the Fed’s strategy to curb inflation.
"Inflation has significantly decreased from 7% to 2.5%. We are dedicated to bringing inflation back to our 2% target to support a robust economy that benefits everyone," Powell stated in a speech on July 31 following the announcement.
Market expectations prior to the announcement suggested that the FOMC would refrain from adjusting rates until September. Pseudonymous crypto analyst Seth observed that Bitcoin's relative strength index (RSI), an indicator used to identify overbought or oversold conditions, is currently "oversold," which could be a potential buy signal. "The FOMC is used to liquidate retail traders who use excessive leverage," Seth noted in a July 31 post on X.
Adding to the market's turmoil were reports of heightened conflict in the Middle East. According to a Reuters report from July 31, Hamas leader Ismail Haniyeh was assassinated in Tehran. Bitcoin has a history of reacting to geopolitical tensions in the region. For instance, on April 19, following reports of explosions at Isfahan airport in Iran, Bitcoin's price dropped by 5.44% to $59,698 within two hours.
Despite the recent dip, some market observers remain optimistic about a potential rate cut in September. "While Fed Chair Powell has not confirmed a rate cut for September, his tone is more optimistic," noted trading resource The Kobeissi Letter. "The Fed is awaiting the next two months of inflation data. A further decline in inflation could pave the way for a September rate cut," the report added.
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