Bitcoin Price Faces $110K Breakdown as Fed Rate Cut Odds Drop to 73%
- The formation of double bottom reversal patterns sets the Bitcoin price for a breakdown below $110,000.
- Wall Street is under pressure as the probability of a September Fed rate cut has dropped to 73%.
- BTC’s fear and greed index dropped to 50% indicating a neutral sentiment among market participants.
The Pioneer Cryptocurrency Bitcoin takes another dive of over 1.9% during Thursday’s U.S. market hours to currently trade at $112,000. The continued selling pressure in the crypto market can be attributed to waning investors’ hope for an interest rate cut in September. The falling BTC is poised for a major breakdown from a bearish reversal pattern, signaling a risk of prolonged correction. Will the Bitcoin price break the $110,000 floor next?
Fed Rate Cut Probability Falls to 73%
Over the past week, the Bitcoin price projected a sharp downturn from $124,517 to $112,100, projecting a loss of 10%. Subsequently, the BTC market cap also plunged to $2.23 trillion.
A key driver behind this downturn is the persistent inflationary pressure in the United States, underscored by July’s Producer Price Index (PPI) coming in higher than expected. The macroeconomic development has triggered a sentiment shift around the September interest rate cut, dropping sharply just days before the Federal Reserve Chair Jerome Powell’s speech.
According to the CME FedWatch Tool data, the odds of a rate cut at the September 17 Fed meeting have fallen to just 73.6%, a steep decline from the 100% priced in just two weeks ago. The move underscores growing caution in the market as investors are waiting for Powell’s tone on inflation and future policy direction.
Despite repeated calls from U.S. President Donald Trump for lower interest rates, the Fed’s path to easing could be complicated by signs of resilience in the labor market and consumer spending.
Furthermore, the remaining 26.4% odds now price in the possibility of the Feb holding rates steady at the current 4.25-4.5% range, while the expectation for rate hikes nearly vanished.
CME FedWatch Tool
If the Fed proceeds with a rate cut in September, the crypto market could receive a notable boost, as lower borrowing costs often increase liquidity and risk appetite, drawing investors’ attention towards volatile assets like Bitcoin and Ethereum.
On the other hand, if rates remained unchained at the 4.25-4.5% range, the lack of fresh monetary policy could dampen investor sentiment and drive a prolonged correction in the crypto market.
Bitcoin Price Eyes Major Breakdown Amid Double-Top Formation
By press time, the Bitcoin price trades at $112,200, with an intraday loss of 1.8%. With today’s drop, the coin price is just inches away from a bearish breakdown below the $111,919 neckline of a traditional reversal pattern called Double Top.
The chart setup is characterized by two sharp reversals from a horizontal resistance zone, displayed in an ‘M’-shaped letter. Historically, this pattern is commonly spotted in major market tops, as it highlights intense overhead supply before a major downturn.
In the daily chart, the momentum indicator RSI (Relative Strength Index) projects a fresh lower high peak in correspondence with the price, indicating the waning bullish momentum in the market.
Thus, a breakdown below the neckline support with the daily candle closing will accelerate the selling pressure in the market. The post-breakout fall could plunge the price 6% down to test support at $105,357, followed by an extended push toward $98,326.
BTC/USDT -1d Chart
On the contrary, if the buyers manage to defend the $111,999 support, the Bitcoin price trajectory could take a sideways shift to recuperate its bullish momentum.
Also Read: Cardano Price Rebounds as Whale Accumulation Tops $100M: Is $1 Jump Close?
