Bitcoin Price Drops Amid Political Turmoil and Anticipation of Fed Meeting

Bitcoin (BTC) experienced a significant price drop on Monday, September 16, 2024, following a second assassination attempt on former President Donald Trump and ahead of a crucial Federal Reserve meeting. The cryptocurrency market’s reaction highlights the intricate relationship between political events, monetary policy, and digital asset valuations.

Trump Assassination Attempt Shakes Markets

At approximately 1 PM EST on Sunday, September 15, Secret Service agents thwarted an assassination attempt on Donald Trump at his West Palm Beach golf course. The suspect, identified as 58-year-old Ryan Wesley Routh, was spotted hiding in the bushes with an AK-47-style rifle. After a brief exchange of gunfire, Routh fled the scene in a black SUV but was later apprehended on Interstate 95 thanks to a witness who captured his license plate.

While no one was harmed in the incident, the event sent shockwaves through both political and financial spheres. President Joe Biden and Vice President Kamala Harris condemned the violence and expressed relief at Trump’s safety, emphasizing the importance of protecting presidential candidates.

Bitcoin Price Reacts

In the wake of the assassination attempt, Bitcoin’s price fell sharply. According to data from CoinMarketCap, BTC dropped from $60,313 to $58,397, representing a 3% decline. This price movement triggered significant market liquidations:

• Total liquidations: $140.15 million
• Traders affected: Over 49,000
• Main impact: Long positions

Analysts attribute Bitcoin’s sharp reaction to Trump’s well-known pro-crypto stance. Many investors anticipate that a potential return to office for Trump could lead to favorable regulations for the cryptocurrency space.

Federal Reserve Meeting Looms

Adding to the market uncertainty is the upcoming Federal Reserve meeting scheduled for this week. Investors are keenly awaiting the central bank’s decision on interest rates, with widespread expectations of a rate cut. Current market sentiment, as reflected by CME Fedwatch, indicates:

• 50% chance of a 25 basis point cut
• 50% chance of a 50 basis point cut

Lower interest rates typically bode well for cryptocurrency markets due to their speculative nature. Many analysts predict that the Fed will initiate an easing cycle, potentially reducing rates by at least 100 basis points by the end of the year.

Market Outlook

Despite the recent turbulence, Bitcoin remains within its established $50,000 to $60,000 trading range seen throughout much of the year. At the tune if writing, Bitcoin is trading at around $58,400, down by almost 3% in the past 24 hours.

The cryptocurrency market continues to grapple with an extended period of reduced retail interest. While the launch of spot exchange-traded funds for Bitcoin earlier this year provided some boost, its impact has been limited.