Bitcoin price drops below $65,000 as Federal Reserve maintains rate and hints at September cut

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Bitcoin (BTC) has dipped below the $65,000 mark after the United States Federal Reserve kept interest rates unchanged during its latest policy meeting. The decision comes amid the ongoing discussions about the crypto-economic landscape and changes in financial policies.

The Federal Reserve’s decision reflects a cautious approach to manage inflation and support the economic growth of the country. By maintaining the current interest rate levels, the central bank aims to find a balance between price stability and a safe environment for economic recovery, which has caused Bitcoin’s price to decline further.

The Federal Open Market Committee (FOMC) chose to hold interest rates between 5.25 percent and 5.5 percent. On 31st July, the Federal Reserve Chair, Jerome Powell, announced that the economy is growing steadily and showing positive GDP growth and Private Domestic Final Purchases (PDFP).
However, he also stated that consumer expenses have reduced thus aligning with their strategy to curb inflation. He further mentioned that inflation significantly decreased from 7 percent to 2.5 percent, and they’re now aiming for a target of 2 percent to support the economy.

Market analysts did not anticipate any crucial changes from FOMC regarding the interest rates until September. However, a pseudonymous commentator, Seth, pointed out that Bitcoin’s Relative Strength Index (RSI) has now entered the oversold margin, leading to a potential buying opportunity. RSI is a technical indicator used to spot a cryptocurrency’s overbought and oversold conditions in the market. 
Some also assume that Bitcoin’s price drop may also be the result of the recent assassination of the Hamas leader Ismail Haniyeh in Tehran. It is not the first time Bitcoin has experienced a price drop in response to growing tensions and conflicts in the Middle East.

The Federal Reserve is currently awaiting the inflation report for the next two months. The decline in inflation rates might lead to a September rate cut. Mark Zandi, a chief economist at Moody Analytics, expects the inflation data to align with the Fed’s goals due to the rising stocks and declining bond yields.

According to market data dated July 31, Bitcoin price dropped to around $64,500 for the first time since July 25. It briefly surged to $65K before falling again but hasn’t crossed the key level since. Bitcoin is currently trading at approximately $64.3K, with around 0.4 percent drop in the last 24 hours.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash