The Bitcoin (BTC) price is set to end Monday with losses of close to 3%. The market is set to end the month on a sour note thanks to not as dovish as hoped-for commentary from US Federal Reserve Chairman Jerome Powell and jitters about Japan’s hawkish incoming PM.
Powell’s speech indicated a preference towards cutting interest rates steadily at 25bps intervals going forward.
The Fed cut interest rates by 50bps earlier this month, the first cut since 2020, and indicated plans to significantly lower rates over the next year to keep the cooling economy in balance.
But markets had started to build up hopes last week that the Fed might cut interest rates by 50bps again in November.
So Powell’s remarks seemed to come as a disappointment to the market.
Bitcoin, which was last trading almost exactly in line with its 200DMA, was also weighed on Monday by news of the incoming Japanese PM.
Ishiba is thought to support policy normalization, though he has immediately thrown his support behind loose monetary policy.
It’s worth noting that the Japanese PM has no say in BoJ policy and may not even be PM in one month, given that he called for an election.
Bitcoin was probably looking for an excuse for a mini correction before the end of the month after a strong rally to as high as $ 66,000 last week.
Last, in the upper $63,700s, the Bitcoin price is now down just over 4% from its recent highs.
Will Bitcoin Pump in October?
Despite the month-end stumble, Bitcoin remains on course to end the month with 8% gains.
That’s highly unusual for September, which is normally a bearish month for the Bitcoin price.
It sets a strong tone for October, which is normally Bitcoin’s strongest month of the year, hence the nickname “Uptober.”
According to bitcoinmonthlyreturn.com, the average September return is -4.4%, compared to an average return of 27% in October.
However, some are concerned that pre-US election uncertainty may discourage the bulls from pursuing higher prices.
Whether a major rally must wait until November or come as soon as next month, risks are tilted to the upside for BTC.
Fed/global central bank easing, the delayed arrival of post-Bitcoin halving tailwinds, and the alleviation of US election uncertainty will likely power BTC higher.
One wild card to that narrative is the US economy. Further weakening could trigger a return of recession fears, causing risk.
US ISM PMI activity data and the September jobs report will be released this week and will be closely scrutinized.
Strong data should support risk appetite and could kick off “Uptober” on a strong footing.
A test of $70,000 could happen very soon.
The post Fed Chair Powell Dampens 50bps Rate Cut Hopes – Here’s How the Bitcoin Price Reacted appeared first on Cryptonews.
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