Key Insights:
- Fed rate cut chances surge amid weaker U.S. jobs data, reinforcing expectations of looser liquidity conditions.
- Despite the policy shift, Bitcoin price remains under pressure, with analysts expecting a potential dip toward $104,000 before a rebound,
- The global crypto market cap (TOTAL) is consolidating between $3.72 trillion and $3.81 trillion.
The upcoming FOMC on September 17 will be the most crucial in deciding Bitcoin and crypto market trajectory further. As per market analysis, investors predict an 89% probability of a 25 bps Fed rate cut. This shows that the market is becoming confident of a loose liquidity condition ahead.
Fed Rate Cut Expectations on the Rise
As per the CME Watch Tool, data shows an 89% probability of a 25 basis point rate cut at the Federal Reserve’s September meeting, signaling strong investor conviction that monetary policy is shifting toward easing. An additional 11% probability is being priced in for a deeper 50 basis point cut, suggesting some participants expect a more aggressive pivot.
Analysts note that either outcome leads to looser financial conditions ahead. This will further allow fresh liquidity inflows into equities, cryptocurrencies, and other risk assets moving into the fourth quarter.
Moreover, the August US jobs data further strengthens the chances of a Fed rate cut next week. The labour market shows clear signs of weakening as the job openings have exceeded expectations.
According to Bureau of Labor Statistics data, the U.S. economy added just 22,000 jobs in August, falling well short of the 75,000 forecast and down from 79,000 in July. At the same time, the unemployment rate edged up to 4.3%, matching market expectations.
This would provide the Fed with additional impetus for proceeding with rate cuts. So far, Fed Chair Jerome Powell has delayed the decision on quantitative easing, citing sticky inflationary conditions in the market. If Powell decides to pivot this time, it would kick in the risk-ON sentiment back into the market.
Bitcoin Price Expectations for September
Despite the growing chances of a Fed rate cut, Bitcoin price has moved sideways with rising selling pressure. Analysts believe that, as per historical trends, BTC could see a further pullback before kickstarting a major rally in Q4. In a message on the X platform, popular crypto analyst Ted Pillows stated:
Another popular crypto analyst, Captain Faibik, noted that Bitcoin is preparing for another bearish move as the rising wedge breakdown unfolds in line with expectations. He noted that the price is approaching what he described as a “safe buying zone,” around $104,000.
According to Faibik, the daily EMA200 remains a key support that Bitcoin bulls must defend to preserve the mid-term bullish outlook. If the level holds, the analyst projected a potential upside target of $125,000 once confirmation is established.
Crypto Market and Fed Rate Cuts
The crypto market could see some volatility with the Fed rate cuts ahead. The global crypto market capitalization (TOTAL) remains capped below the key resistance level of $3.81 trillion, a threshold seen as critical for sustaining further momentum.
Intraday volatility continues to shape trading activity for now, keeping investors on edge. TOTAL is consolidating within a range of $3.72 trillion to $3.81 trillion, with neither macroeconomic factors nor technical indicators providing a clear directional signal.
Fresh inflows from ETFs and traditional finance could provide the catalyst for renewed upside. A strong pickup in institutional demand next week may allow TOTAL to reclaim the $3.81 trillion level as support, potentially setting the stage for a move toward $3.89 trillion in overall crypto market capitalization.
Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draws his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fiction novels and sometimes explores his culinary skills.
