Bitcoin News Today: Fed Hints At Delayed Rate Cut Crypto Bull Run Hits Roadblock

The recent release of the U.S. Federal Reserve’s FOMC minutes has introduced uncertainty into the cryptocurrency market, potentially slowing the pace of the ongoing bull run. The Fed kept interest rates unchanged at 4.25% to 4.5%, a decision widely anticipated by the market. However, the cautious tone from Fed Chair Jerome Powell during the subsequent press conference has led investors to significantly reduce their expectations for a rate cut in September [1].

Prior to the announcement, the probability of a September rate cut was at 63%. That number has since dropped to 40%, marking a sharp decline in the optimism that had previously supported the crypto market [1]. Powell emphasized that the Fed is not making decisions in advance and will continue to monitor economic data closely over the next two months before deciding on any action [1].

The Fed’s hesitation is being attributed to several factors, including rising tariffs, persistent inflation, and a resilient labor market. As of the latest report, inflation stands at 2.7%, above the Fed’s 2% target and increasing for four consecutive months. In such an environment, the central bank appears more inclined to maintain the current rate rather than implement a cut that could stimulate the economy [1].

This shift in monetary policy expectations has immediate consequences for cryptocurrencies. Historically, lower interest rates have encouraged investors to seek higher-yield, higher-risk assets such as Bitcoin. When rates fall, borrowing costs decline, and this often leads to increased leverage and risk-taking behavior in the crypto space. A delayed rate cut, therefore, acts as a brake on the momentum of the crypto market [1].

The market’s reaction to the news was swift. Following Powell’s comments, Bitcoin experienced a brief dip before stabilizing. The total crypto market capitalization remained around $3.94 trillion in the days after the announcement. Over the past two weeks, the market has remained range-bound, with traders waiting for stronger macroeconomic signals to guide further price action [1].

Despite the dimming hopes for a near-term rate cut, some analysts remain optimistic about Bitcoin’s trajectory. According to predictions from CoinCodex, Bitcoin is expected to experience steady gains through August. These projections are based on factors such as ETF inflows, declining exchange balances, and improving market sentiment. However, the model does not anticipate a dramatic rally. Instead, it suggests a gradual and sustainable upward movement. If the current price range holds through mid-August, Bitcoin could begin testing key resistance levels near $70,000 later in the third quarter [1].

Long-term holders and institutional buyers have also demonstrated confidence in Bitcoin’s fundamentals, providing additional support to the market. This confidence persists even in the absence of immediate monetary easing [1].

The evolving relationship between Fed policy and crypto markets highlights the growing influence of macroeconomic conditions on digital assets. While rate cuts have traditionally acted as a tailwind for crypto prices, the current environment suggests that investors will need to remain patient as central banks navigate complex economic signals before taking action [1].

Source: [1] The Crypto Bull Run Has Just Hit A Major Roadblock Amid FOMC Minutes Release (https://www.livebitcoinnews.com/the-crypto-bull-run-has-just-hit-a-major-roadblock-amid-fomc-minutes-release/)