Why Did Bitcoin Drop Below $61K Despite the Fed's Dovish Signals?

Bitcoin (BTC) continues to struggle, trading below $61,000 even after the Federal Reserve indicated a dovish stance in the FOMC minutes released on October 9. As of the latest update, BTC was priced at $60,935, reflecting a 2% decline over the past 24 hours.

Fed's Interest Rate Cut

The FOMC minutes confirmed a consensus for a 50 basis point reduction in interest rates this year, aiming to adjust rates down to a range of 4.75% to 5%. While some members advocated for a more cautious 25 basis point cut, the majority argued that a larger reduction would be beneficial for aligning with current inflation and labor market conditions.

Altcoin Performance

Bitcoin's lackluster performance was mirrored by other major altcoins. Ethereum (ETH) dropped 1%, while Solana (SOL) fell 2.5%, and BNB Coin decreased by 2.3%. Despite this, futures open interest surged significantly following the FOMC meeting.

Equities Market Reaction

In contrast to the crypto market, the US equities market reacted positively, with the S&P 500 climbing 0.68% and approaching new all-time highs. The Nasdaq Index also rose 0.5%, reaching its highest level since early September.

Market Dynamics

Andrew Kang, co-founder of Mechanism Capital, suggested that the divergence between crypto and equities is natural given that equities are more closely tied to interest rate policies. The current uncertainty among traders is palpable, with many awaiting upcoming US economic data on October 10 before making further moves.

Bitcoin Market Data

As of 12:21 am UTC on October 10, 2024, Bitcoin's market cap stands at $1.2 trillion, with a 24-hour trading volume of $27.55 billion. The total crypto market is valued at $2.12 trillion, with Bitcoin dominance at 56.65%.

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