Key Points
- Bitcoin [BTC] experienced a 2.45% drop, reaching critical support, following the release of FOMC Minutes from the September meeting.
- The U.S. CPI data could potentially trigger a rebound or escalate the decline of BTC.
Bitcoin [BTC], the world’s largest digital asset, led the crypto market decline on the 9th of October, losing 2.45% of its value.
The drop was from $62.5K to a low of $60.3K, following the release of FOMC Minutes from the September meeting.
FOMC Minutes Impact on Crypto
Among the major cryptocurrencies, Binance [BNB] experienced the highest retracement at 2.65% at press time.
Meanwhile, XRP’s decline was negligible, while Solana [SOL] and Ethereum [ETH] were down 2.4% and 1.8% respectively.
However, Uniswap [UNI] emerged as a top daily gainer.
The decline in the market was due to the FOMC Minutes, which lowered expectations of another 50 bps (basis points) Fed rate cut in November.
The minutes revealed that most members supported the aggressive 50 bps Fed rate cuts in September, citing weak US labor market conditions.
However, the U.S. labor market has since seen significant growth.
According to data released on the 4th of October, 250K roles were added in September, exceeding analysts’ expectations.
This implied that labor market concern, a significant factor in an aggressive rate cut projection, was no longer a concern.
Future Projections for BTC
At press time, traders were pricing 80% of a 25 bps cut and a 20% chance of keeping the current rates unchanged.
However, this could change depending on the September inflation data (CPI).
BTC has shown increased sensitivity to Fed rate cut expectations and U.S. equities, a typical reaction common with ‘risk-on’ assets.
Interestingly, U.S. equities didn’t sink like crypto markets after the FOMC Minutes.
U.S. stocks closed in green, as BTC faced increased sell pressure.
According to CryptoQuant’s JA Maartun, the BTC plunge could reverse if the U.S. investors eased the selling pressure.
On price charts, BTC was at key support near $60K.
Although the support stopped the plunge in early October, whether it will hold after the U.S. CPI data remained to be seen.
Should the $60K support hold, a rebound toward the 200-day MA (Moving Average) of $63.5K would be feasible.
However, a crack below the support post-CPI could drag BTC to the next support at $58K.