Bitcoin waits attentively around USD $122,000 for FED Powell's speech

By Hannah Perez

Bitcoin registered volatility amid the release of the FED minutes from the September meeting, when there was consensus on a rate cut. Now, the market is attentive to Powell’s words for clues about the course of monetary policy for the remainder of the year.

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Bitcoin saw volatility amid the release of the FED minutes on Wednesday.
It corrects around USD $122,000 after a momentary recovery to USD $123,000.
FED minutes in September showed caution on inflation and divisions on upcoming cuts.
The market is now eagerly awaiting Powell’s comments this Thursday for clues on the course of monetary policy.

Bitcoin (BTC) remains stable this Thursday morning, trading around USD $122,000, while the cryptocurrency market expectantly awaits the comments of the president of the United States Federal Reserve (FED), Jerome Powell.

The data of CoinGecko show that BTC registers a price of USD $122,654 at 7:24 AM (ET), with a slight decrease of 0.5% in the last 24 hours. The cryptocurrency market appears to be on pause, pending signals that Powell could offer during his speech at the Community Banking Conference in Washington, scheduled for 12:30 GMT.

Investors are looking for clues about the FED’s future monetary policy decisions, especially following the partial US government shutdown, which has disrupted the release of key economic data, such as inflation and employment reports, used by the central bank to determine interest rates.

FED minutes and rate expectations

Minutes from the September meeting of the Federal Open Market Committee (FOMC) revealed a consensus among officials to implement an initial 25 basis point cut in interest rates, a move that has historically favored risk assets such as cryptocurrencies.

However, divisions remain over the amount of additional cuts for the remainder of the year, with debates between two or three total reductions, according to summary minutes. A majority of 19 officials anticipated at least two more rate cuts this year, while seven anticipated no further reductions. The dot plot published last month showed a slight majority in favor of two more rate cuts this year, which would bring the benchmark rate to the 3.50 – 3.75% range.

Discussions largely focused on the weakening labor market and early signs that inflation could accelerate again. This uncertainty has generated caution in the markets, with traders attentive to any indication from Powell about a possible new cut in October.

The strengthening of the US dollar, which reached its highest level in two months, has added pressure on Bitcoinwhich fell below a key support level at $123,000 on Wednesday. Despite this, the flagship cryptocurrency showed signs of recovery by momentarily returning to USD $123,000, after having reached an all-time high of USD $126,000 on Monday.

Movements in the crypto and ETF market

The performance of Bitcoin was also reflected in the flows of exchange-traded funds (ETFs) of Bitcoin spot.

On Wednesday, the group of 12 funds recorded its eighth consecutive day of net capital inflows, amassing $440.73 million in a single session and a total of $2.5 billion so far this week, according to data from SoSoValue. This flow of capital underlines the growing institutional interest in Bitcoindespite recent volatility.

In the big picture, the cryptocurrency market shows mixed behavior. While Bitcoin is 2.9% below its historical record, other important cryptocurrencies such as Ethereum (ETH), Binance Coin (BNB) and XRP have recorded drops of 2.6%, 2.7% and 1.8%, respectively, in the last 24 hours. The total capitalization of the digital currency market has also decreased by 0.7%, standing at USD $4.27 trillion, according to CoinGecko.

Waiting for Powell’s clues

The recent strength of the dollar, combined with uncertainty over monetary policy, has created a challenging environment for Bitcoin and other digital assets. The FED minutes highlighted concerns about labor market weakness, prompting policymakers to reduce the key overnight borrowing rate. However, the lack of new economic data due to the government shutdown complicates projections, leaving markets in a state of expectation.

Powell’s speech will be crucial in determining whether the FED will opt for a more aggressive stance on rate cuts, which could boost risk assets, or take a more cautious approach, which could keep pressure on Bitcoin. For now, crypto investors remain vigilant, with BTC stabilizing around $122,000 as the market awaits clarity.

Article written with the help of AI, edited by DailyBitcoin

Image generated with an AI tool, under a free use license

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