Bitcoin’s price struggles under the $112,500 support level, reflecting a concerning trend for cryptocurrencies. Despite the favorable conditions such as rising gold prices and stock markets, Bitcoin 
$64,106 remains stagnant. This seems counterintuitive as an interest rate cut appeared imminent, raising questions about the crypto market’s subdued performance.
Why Aren’t Cryptocurrencies Rising?
The Non-Farm Payroll data revealed its poorest outcome since late 2021, coinciding with an increase in unemployment rates. The Federal Reserve’s potential 50 basis point reduction in September was widely discussed, yet cryptocurrencies failed to surge. Bitcoin briefly touched $113,300 but quickly retracted, hovering now around $110,500.
Multiple factors contribute to the stunted growth of cryptocurrencies; President Trump’s timeline for Russia concerning Ukraine is approaching its deadline, demanding concrete progress. Furthermore, Trump threatened Russia with new sanctions and reiterated secondary sanction threats. Additionally, the situation is compounded by Trump’s attempt to remove FOMC member Cook, which has been legally challenged. Cook’s attorneys claim an attack on the Fed’s independence by Trump.
The ongoing debates surrounding the Fed’s independence resurfaced with attempts to remove Powell, historically leading to declines in cryptocurrency values; Cook’s case further exacerbates these concerns. There is apprehension regarding potential tariffs impacting inflation, leaving investors wary of a deeper crisis that Fed’s rate cuts might inadvertently cause.
Trump’s suggestion to rename the Department of Defense as the Department of War stirs fears of reigniting geopolitical tensions. There is a prevailing belief that Bitcoin may have reached a cycle peak since it failed to gain traction above $120,000. As a result, investors are reluctant to take significant risks, diverting liquidity away from altcoins.
Bitcoin (BTC)
Bitcoin’s prolonged pattern of lower highs signals weakness. Despite a hopeful recent attempt, this effort remained an upper wick without surpassing previous peaks, furnishing selling opportunities for investors. Viewing this pattern, Bitcoin shows a distinct possibility of testing below the $100,000 mark.
The historically negative performance of September, coupled with overarching uncertainties, tones from the Fed meeting, and the pace of interest rate cuts, presents a host of challenges. Consequently, Bitcoin is more likely to move sideways or downward. Absent Trump’s attempt to remove Cook, a more favorable Bitcoin chart might have emerged.
