Bitcoin Slips Below $113K Despite Fed Rate Cut Hopes
Bitcoin fell under the $113,000 mark on Monday, dropping nearly 2% to around $112,550. This is its lowest level in six weeks, even though traders are still betting on a Federal Reserve rate cut in September.
Last week, Bitcoin had jumped above $117,000 after Fed Chair Jerome Powell’s speech at Jackson Hole. He hinted that weak job numbers could lead to policy changes, which fueled strong optimism for easing. But that rally was short-lived, as profit-taking quickly pushed Bitcoin back down.
Adding to the pressure, Cleveland Fed President Beth Hammack dismissed the idea of near-term rate cuts, pointing to stubborn inflation. Her hawkish comments made investors more cautious, weighing on Bitcoin and other cryptocurrencies.
In the broader crypto market, Ethereum and Solana also traded lower, showing signs of consolidation. Traders remain on edge as they try to balance hopes for Fed easing with ongoing concerns about inflation.
For the forex market, the changing Fed outlook has also kept the U.S. dollar (USD) volatile. A stronger dollar often hurts Bitcoin and risk assets, while signs of rate cuts tend to boost demand for cryptocurrencies and high-yielding currencies like the euro (EUR) and the pound (GBP).
Impact:
Bitcoin could recover if the Fed confirms a September cut, as lower rates usually support risk assets. But hawkish Fed comments or a stronger U.S. dollar might keep BTC under pressure.