Bitcoin dropped 3% to $63,000 on Monday, September 30th. The decline corresponded with Fed Chair Jerome Powell's comments about interest rates. Powell indicated at two further 25-basis-point cuts this year. He anticipates a total decline of half a percentage point.
The market swiftly changed its expectations. Traders now expect a 25 basis point drop in November, with a probability of 61.8%. This is down from prior expectations of a 50 basis point drop. The shift caused a shift in mood ahead of key US labor reports. US Bitcoin demand has weakened. The Coinbase Premium Index has turned negative. ETF inflows fell from $500M on Friday to only $61.3M on Monday.
Despite the decline, $63K remains an important support level. It shows the realized price for short-term holders since mid-September.
Positive catalysts still exist. The probable termination of the Fed's quantitative tightening program may enhance risk assets. However, rising Middle Eastern tensions threaten to undermine Bitcoin's "Uptober" hopes. Investors are now looking to future US labor data for more market movement.
