The Federal Reserve (Fed) is set to hold its highly anticipated September meeting from September 17-18. During the press conference on September 18, it is expected that the Fed will announce an interest rate reduction. Market expectations indicate that the Fed may lower interest rates by 25 or 50 basis points, with significant implications anticipated for Bitcoin 
$89,935 and other cryptocurrencies.
Likelihood of Interest Rate Cuts and Market Expectations
According to CME FedWatch data, the probability of a 50 basis point rate cut at the September Fed meeting stands at 59%, while the possibility of a 25 basis point cut is at 41%. Up until last week, the chance of a 25 basis point cut was higher, but the recently released PPI inflation data showed signs of improvement in the U.S. economy, increasing expectations for a larger reduction.
This interest rate cut would mark the first reduction since March 2020. The crypto community is closely monitoring this macroeconomic development, as a rate cut is believed to significantly affect the price of Bitcoin and the broader cryptocurrency market.
Impact of Rate Cuts on the Crypto Market
Crypto trader and analyst Doctor Profit shared insights regarding the potential effects of an interest rate cut on Bitcoin’s price following the September Fed meeting. The analyst warned that Bitcoin may face downward pressure in the short term.
He also noted that rising tensions between Israel and Lebanon could heighten market fears, potentially driving Bitcoin prices lower. “In these volatile days, protecting our capital must be our priority, and we should implement appropriate risk management,” he stated.
Expert Opinions and Future Outlooks
Doctor Profit expressed optimism about Bitcoin’s medium and long-term outlook following these macroeconomic developments. He indicated that “the inevitable money printing frenzy will alleviate the panic in the market,” forecasting increased liquidity in the cryptocurrency market.
The analyst highlighted that the rise in USDT supply and upcoming repayments to FTX creditors in the fourth quarter are expected to provide additional liquidity to the market. He emphasized that once Fed Chairman Jerome Powell and the committee conclude rate cuts, the money printing machines will start operating again, asserting that “when the money printing process begins, the market’s panic will give way to a rally.”
The decision regarding interest rate reductions at the September Fed meeting holds critical importance for global financial markets. The magnitude of the rate cut and subsequent economic policies will influence not only traditional markets but also the cryptocurrency market. It is vital for investors to exercise caution and focus on risk management during this uncertain period. Experts predict that increased liquidity in the medium and long term could create a favorable environment for cryptocurrencies.
