Bitcoin falls with equities as markets position for a single Fed rate cut this year
Market realignment for a single U.S. Federal Reserve rate cut this year has dragged bitcoin and equities lower.However, after a recent rate cut by the Bank of Canada and the European Central Bank, the market expects the Federal Reserve and the Bank of England to follow suit in coming months, analysts said.
Bitcoin BTC -0.56% is struggling to recover after the U.S. Federal Reserve suggested on Wednesday it would pencil in only one rate cut this year.
The U.S. central bank's more hawkish tones impacted equity markets , and bitcoin has mirrored their downtrend by declining over the past day. Futures ticked lower after this week's Federal Open Market Committee meeting. Dow Jones Industrial Average futures dropped 0.63% and SP 500 futures were down 0.33% in pre-market trading.
Bitcoin miners taking profit
According to analysts at QCP Capital, the recent decline in bitcoin's price can also be attributed to miners selling their BTC holdings to offset the reduction in block rewards following the Bitcoin Halving in April. "Bitcoin miners are undergoing the post-halving capitulation, directly capping the price," QCP Capital analysts said.
According to Bitfinex analysts, after central banks around the world have already started to cut rates — such as the Bank of Canada and the European Central Bank — markets are anticipating a broader trend towards monetary easing.
"It seems clear that the Bank of England and the Federal Reserve will follow suit in the coming months. The global liquidity cycle indicates that money supply is likely to increase, which can support asset prices, including cryptocurrencies," Bitfinex analysts told The Block.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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