Bitcoin Price Faces New Risk as Fed Rate Hike Odds Rise Above 50%
The probability of a Federal Reserve rate hike in September has risen above 50%, reaching approximately 57%–58%. This shift follows a hawkish speech by Fed Chair Kevin Warsh at Jackson Hole, which caused Bitcoin to dip below $77,000 before recovering. The market is now pricing in higher inflation risks due to rising oil prices and the depletion of U.S. Strategic Petroleum Reserves. Warsh emphasized that current PCE inflation remains above 3%, with core components continuing to rise sharply. Higher interest rates typically make speculative assets like Bitcoin less attractive, but analysts note a September hike is not yet certain. JPMorgan still anticipates a December increase while Barclays forecasts hikes in both September and December. Meanwhile, retail buying activity around recent BTC lows has been minimal compared to past cycles, suggesting that many investors remain sidelined. Analysts suggest this could provide future support if Bitcoin resumes its upward trend.
Topics: Bitcoin Crypto Market Reaction Federal Reserve Inflation Interest Rates