Bitcoin hits near 1-month high

At around 1:30 a.m. on September 19, Bitcoin (BTC) jumped from $59,200 two hours earlier to over $61,150 per unit, an increase of nearly $2,000 in a short period of time. After that, the world's largest cryptocurrency cooled down a bit, but quickly started to increase again.

At around 8am on September 19, Bitcoin rose to nearly $62,579 per unit, up more than 3% compared to the same period yesterday. This level is also the highest since August 27, or more than 3 weeks. BTC is in a volatile zone but still holds around $62,000.

Similarly, Ether also caught the uptrend of about 2.5% to near the $2,400 area, Binance Coin increased by more than 1.5%, Solona accumulated nearly 3%. Many other cryptocurrencies also followed the improvement trend.

The move comes after the US Federal Reserve (Fed) cut interest rates by 50 basis points (0.5%) to 4.75-5%. The Fed’s first rate cut since 2020 was a move that was widely anticipated by cryptocurrency traders, with Bitcoin and the broader market expected to benefit from the policy reversal.

Instead of rising in a single move, cryptocurrencies have been choppy. This can be explained by looking at the performance of the US dollar index (DXY). The index fell to 100.3 - its weakest level since July 2023 - then rose back to 101 since the Fed cut interest rates. This is an important metric to watch when assessing risk assets, according to analyst James Van Straten ofCoinDesk.

Joel Kruger, chief market strategist at LMAX Group, said the focus from here will be on whether the market will continue to favor risk assets in a cooling interest rate environment. In addition, future actions from the Fed will be worth paying attention to. Fed members expect the average benchmark rate to fall to 4.4% by year-end, which would leave room for about 50 basis points of cuts at the next two meetings, up from just one cut previously expected.

Cryptocurrencies’ correlation with traditional risk assets has risen to its highest level in about 18 months, said David Lawant, head of research at FalconX, highlighting the growing importance of macro news.

Global markets have been expecting looser monetary policy since September, when Chairman Jerome Powell said it was “time for policy to adjust” with inflation cooling and unemployment rising. However, there is still disagreement over whether the Fed will cut rates further or stop at this level.

The uncertainty has caused the cryptocurrency market to fluctuate, rather than rallying in a completely positive scenario. Market maker Wintermute predicts that Bitcoin will move 2-3% in either direction after today's Fed decision.