Bitcoin declines after Fed holds rates steady

Bitcoin (BTC) is trading around $64,770, down over 2% in the past 24 hours after the Federal Reserve announced it would hold rates steady.

Bitcoin reacts as Fed reveals rates decision

The Federal Reserve announced it would leave rates unchanged at 5.25%-5.5%, according to market expectations. The news led to Bitcoin and the crypto market experiencing a slight downturn. However, most market participants expect the SEC to cut rates as Q3 approaches a close.

A potential interest rate cut by the Federal Reserve later this year could be a positive factor for risk assets like Bitcoin. Historically, lower interest rate environments have been favorable for cryptocurrencies, as investors tend to seek higher-yielding assets.

Despite the uncertain economic outlook, the prospect of easing monetary policy has bolstered positive sentiment around Bitcoin. However, investors — especially among the short-term holders' cohort — may consider selling their tokens if Bitcoin breaches the 60K psychological level. Such levels could also trigger "aggressive whale accumulation and increased crowd negativity would be the ideal recipe for a big market-wide bounce," noted Santiment.

Bitcoin Social volume chart

Politically, Bitcoin is also in the news as the American polls draw near. Former U.S. President Donald Trump and Republican Presidential Candidate promoted limited edition Bitcoin-themed sneakers on social media after speaking at the Bitcoin 2024 conference. He mentioned that the sneakers could be purchased with Bitcoin or other cryptocurrencies. The BTC gold sneakers high top sold out in less than three hours after Trump announced their launch.

Meanwhile, during his speech at the Conference, Trump promised to fire SEC Chair Gary Gensler and create a "strategic bitcoin reserve" if elected in November. He has also been associated with receiving heavy crypto donations and selling NFT collections.

As Bitcoin rises, market watchers are keenly observing its potential to surpass the $70,000 psychological resistance level. If Bitcoin maintains a position above this threshold, it could indicate a new wave of bullish momentum and draw more investment into the cryptocurrency market.