Bitcoin has been hovering around $110,000 for almost a week now, with experts seeing potential momentum primarily in the US Federal Reserve’s interest rate cut.
As the Sept. 17 meeting approaches, the CME FedWatch tool is giving a 100% chance of a rate cut. Overall, experts are expecting a 25 basis point cut, and the tool gives a 10% chance that the Fed will decide to cut by a larger 50 basis points.
The weak US jobs report did raise expectations for a more accommodative policy from the US Federal Reserve, which typically supports risk assets such as Bitcoin, — noted BTC Markets crypto analyst Rachel Lucas.
However, the market has already priced in a certain degree of policy easing. At the same time, we are seeing profit-taking by institutional investors, while flows ETF remain relatively stable.
Lucas believes that the combination of these two factors is currently holding back Bitcoin’s growth, keeping the cryptocurrency in a narrow range.
Vincent Liu, Chief Investment Officer at Kronos Research, believes that the Fed’s decision to cut rates will not have a positive impact on the price of BTC.
Rate cuts may reflect economic weakness, while high inflation and cautious risk sentiment are limiting risk appetite. Without stronger inflows ETF or real growth in liquidity, the $120 mark remains a serious obstacle.
In the first week of September, how Bitcoinor Ethereum-ETF recorded modest inflows compared to August or July, when these values reached record highs. Let’s not forget that the current market cycle is largely driven by institutional capital, so their activity directly affects market dynamics.
At the same time, the supply of stablecoins on the blockchain is approaching record highs, setting the stage for potential growth, while exchange balances of Bitcoin and Ethereum continue to decline.