Bitcoin’s price volatility is likely to decrease as market participants anticipate a potential rate-cutting cycle by the U.S. Federal Reserve next month, according to analysts from QCP Capital. The crypto market is closely watching upcoming U.S. economic data, which could influence the Fed’s decision-making process.
QCP Capital analysts noted that in the lead-up to next week’s U.S. non-farm payroll report, market volatility is expected to continue its downward trend. “We expect market volatility to continue its downtrend as the market positions itself for potential rate cuts by the Fed,” the analysts stated.
Key U.S. economic data releases in the coming days, including next week’s non-farm payrolls report and Friday’s GDP data, are expected to provide market participants with greater clarity on the likelihood and potential scale of a rate cut at the next Federal Open Market Committee (FOMC) meeting scheduled for September 18.
The U.S. non-farm payrolls data, set to be released on Friday, September 6, is a closely watched metric that can significantly influence the Federal Reserve’s interest rate decisions. The previous report in early August revealed an unexpected rise in the U.S. unemployment rate to 4.3% from 4.1%, sparking concerns that the Fed may be lagging in its rate-cutting efforts.
QCP Capital analysts also pointed out the potential influence of the upcoming U.S. GDP report on Bitcoin’s price, although they believe its impact on the cryptocurrency market may be limited. The report is likely to reinforce the prevailing narrative of a slowing U.S. economy, which has shown signs of deceleration, though it remains uncertain whether a recession is imminent.
In response to the current market conditions, derivatives market participants have been hedging for potential near-term downside movements in both Bitcoin and Ether. “Risk reversals until October are still skewed towards puts in both Bitcoin and Ethereum, indicating that the market remains cautious about the downside,” the analysts added.
As of 7:39 a.m. ET, Bitcoin’s price has decreased by 1% in the past 24 hours, trading at $59,500. Bitcoin’s dominance in the crypto market stands at 53.9%, while Ether’s dominance is at 13.9%, according to CoinGecko data.