Expectations surrounding the possible rate cuts by the Federal Reserve in September are approaching peak levels, particularly among crypto investors. Historically, Fed rate reductions have often meant the start of a Bull Run as it informs investors that they will acquire more positions in risky assets such as Bitcoin and crypto. Therefore, just Two weeks left at the next FOMC meetingvotes have already come on what the Fed will do and how the crypto market will respond.
The probability increases by more than 97%
CME Watch Tools for CME Group Website Currently, it shows the highest odds so far for the Fed rate reduction in September. The percentage fluctuated in August, rising above 92%, and again returned to 75% as various developments emerged. However, as the market enters September, sentiment has been completely skewed positively, and odds have risen dramatically.
Related readings
Bitconist reported it The probability has dropped to 75% Towards the end of August. But now, this number has returned again, reaching the highest level ever, FOMC Announcement. The Fed Watch Tool reads a 97.6% chance that the Fed will cut its fees this September and trigger another bull run.
This number means there is only a 2.4% chance that the Fed would choose to keep it at the same level as last time. In contrast, there is still a 0% chance that a rate hike will take place this September. In fact, there has been no talk of Fed rate hiking in months, but it suggests that All focus remains on rate reduction.
How the crypto market reacts
Naturally, Fed rate reductions are bullish for both the stock and crypto markets as they allow investors to take on more risks. This will cause liquidity flows to market, rapidly increasing prices and at the same time increasing market volatility.
There is hope that the crypto market could close the news, especially as US President Donald Trump has supported interest rate cuts for months. However, since hope is often destroyed, you also need to be cautious due to high expectations.
Related readings
Reports include an on-chain data analysis platform Santimento revealed Social conversations with the words “Fed”, “rate” and “cut” have risen to the highest levels in almost a year. This suggests a lot of bullishness surrounding the FOMC meeting. However, these periods often reached the top, leading to the possibility of “buying rumors and selling news” events.
If the latter is, it means that the price could rise FOMC Meeting And it crashes if the announcement is different from expectations. Therefore, it would be wise to be cautious about this period, especially with the hope of high volatility.
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