Bitcoin Price Volatility Expected to Decline

Bitcoin (BTC) price volatility is anticipated to decrease as market participants brace for a potential rate-cutting cycle by the U.S. Federal Reserve in the coming month.

Market Trends

In light of next week’s U.S. non-farm payroll report, market volatility is expected to continue its downtrend as investors position themselves for possible Fed rate cuts, according to QCP Capital analysts.

Next week’s U.S. non-farm payrolls and the upcoming GDP data are anticipated to provide investors with clearer insights into the likelihood and scale of any rate cuts from the Federal Open Market Committee meeting scheduled for September 18.

Key U.S. Economic Data Releases

U.S. non-farm payrolls data will be released on Friday, September 6. This critical metric holds the potential to influence the Federal Reserve’s interest rate decisions. The prior non-farm payroll report from early August indicated an unexpected rise in the U.S. unemployment rate to 4.3% from 4.1%, causing a global market sell-off amid concerns about the Fed’s timing on rate cuts.

QCP Capital analysts underscored the impact of today’s upcoming U.S. GDP report on Bitcoin’s price, noting it would likely have a lesser effect on the cryptocurrency market, especially if it supports the narrative of a slowing U.S. economy. Although signs of economic slowdown are evident, the likelihood of an imminent recession remains uncertain.

Risk behaviour in the derivatives market shows participants are hedging against potential downside movements for both Bitcoin and Ethereum. “Risk reversals until October remain skewed towards puts in both Bitcoin and Ethereum, indicating cautious market sentiment about downside risks,” the analysts remarked.

Current Bitcoin Market Status

As of 7:39 a.m. ET, Bitcoin’s price has declined by 1% in the last 24 hours, trading at $59,500. Bitcoin holds a dominance of 53.9%, while Ethereum’s dominance is at 13.9%, according to CoinGecko data.