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How Bitcoin (BTC) Price Will React to Wednesday’s Possible Interest Rate Cut: Here Are The Predictions

Bitcoin started the week with a decline as markets prepare for the Fed’s expected rate cut this week.

BTC price has lost approximately 3.70% of its value during the day and is trading at $57,800 at the time of writing.

The first Fed rate cut in more than four years potentially signals looser financial conditions, which could benefit riskier assets like cryptocurrencies. However, investor sentiment remains cautious amid uncertainty over the size of the rate cut and how markets will react to Fed officials’ updated economic projections, known as dot plots, and Fed Chair Jerome Powell’s briefing on Wednesday.

“The rate cut itself is less important than the signals during the press conference and the release of the updated dot plot,” said Sean McNulty, trading director at liquidity provider Arbelos Markets. “If the chart and press conference are significantly dovish, we would expect Bitcoin to outperform on the upside.”

Traders in the bitcoin options market are bracing for a significant shift in response to the Fed meeting. According to Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets, traders are “pricing in a significantly greater event weight than we’ve seen recently,” reflecting the heightened anticipation surrounding the Fed’s policy change.

*This is not investment advice.

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