Bitcoin Struggles to Stay Near $60,000

The crypto market is awaiting the U.S. Federal Reserve meeting.

Bitcoin, the world’s most prominent cryptocurrency, dropped below $60,000 last week, trading at $58,076 on Monday. Over the past week, Bitcoin has lost 5.7%.

According to several crypto websites, this week the market’s focus will be on the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting on interest rates, scheduled for Wednesday, where a rate cut is expected.

The first rate cut since March 2020, which will only be confirmed at the FOMC meeting on September 18, has already been factored into the markets.

The debate currently centers around a 0.25% or 0.5% cut, with the latest data from CME Group’s FedWatch Tool suggesting the latter is more likely.

For Bitcoin, the outlook is complicated. While risky assets should technically benefit from the added liquidity flowing into markets as a result of monetary policy easing, analysts are drawing comparisons not with past booms but with potential downturns.

Although a rate cut might seem positive, it signals deeper concerns, such as a collapse in borrowing, spending, and investment. In a letter sent Monday to Fed Chair Jerome Powell, Democrats, including Senator Elizabeth Warren, urged policymakers to lower the U.S. central bank’s benchmark interest rate by up to 75 basis points this week in an effort to shield the U.S. economy from potential damage.