Bitcoin is finding its footing after a weekend selloff as weak US payroll data and an unexpected Federal Reserve resignation revive hopes of a September rate cut.
Analysts are drawing parallels to the central bank’s last-minute U-turn in late 2024. It was a shift that saw Bitcoin’s price double by year’s end.
The CME FedWatch tool, which tracks trader positioning via futures markets, now shows an 80% chance of a rate cut in September, up from just 40% on Friday.
The shift accelerated after July’s disappointing jobs report and the sudden resignation of Fed Governor Adriana Kugler.
Her departure gives President Donald Trump a chance to reshape the Fed’s board by nominating an ally who favours monetary easing, such as former National Economic Council director Kevin Hassett.
“Last year’s August growth scare spurred the Fed into a ‘catch-up rate cut rush’ from September to December,” Presto Research analysts Peter Chung and Min Jung wrote in a market brief on Monday, “doubling Bitcoin’s price in the process.”
Two Fed officials already dissented against holding rates steady from last week’s meeting, adding to speculation that the FOMC may be nearing a tipping point.
At the same time, Trump has ramped up his attacks on Fed Chair Jerome Powell, calling him “too late,” “too stupid,” and “too political” after last week’s decision to hold rates at 4.25% to 4.5%.
The shift in sentiment has triggered a modest recovery in crypto markets, which shed more than $150 billion in value on Friday.
Bitcoin fell to a three-week low of around $112,000 over the weekend before bouncing to $114,500 on Monday.
Historical patterns may also favour the bulls. While August returns have been mixed, Bitcoin has often rallied in September and October during prior easing cycles, according to data from Coinglass.
Crypto market movers
Bitcoin has gained 0.9% over the past 24 hours and is trading at $114,560.Ethereum is up 2.7% in the same period to $3,550.
What we’re reading
Trump Media brings Truth token plans into the open in latest SEC filing — DL NewsETH companies vs just buying ETH — Milk RoadTequila, Drugs and Torture: The Spending Binge of Two Crypto Bros That Ended Behind Bars — Wall Street JournalBy Not Staying Chain-Agnostic With Base, Could Coinbase Make a Wrong Bet? — UnchainedArkham links $3.5bn Bitcoin theft to quiet exit of Chinese mining giant Lubian — DL News
