How Will Bitcoin and Gold Move Amid Dovish US Fed Monetary Policy Outlook?
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How Will Bitcoin and Gold Move Amid Dovish US Fed Monetary Policy Outlook?

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Azeez Mustapha

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Bitcoin bulls remain cautious ahead of the US Federal Reserve’s FOMC meeting on Wednesday, while Gold continues its rally, eyeing fresh all-time highs at $2,800. The market is keenly watching the Fed’s policy stance, which could determine the next major moves for both assets.

Bitcoin Faces Selling Pressure but Could Rebound

Bitcoin’s price is experiencing downward pressure as the Federal Reserve prepares for its first FOMC meeting under the Trump administration. After facing rejection at $103.5K, BTC is testing support near $100K. Crypto analyst Ali Martinez has identified a bearish signal using the TD Sequential indicator, which suggests that BTC could revisit lows around $99,000 before potentially rebounding.

How Will Bitcoin and Gold Move Amid Dovish US Fed Monetary Policy Outlook?
Source: X

Despite the current weakness, a dovish stance from the Fed could fuel a strong revival in Bitcoin and the broader crypto market. Market participants anticipate that lower interest rates could enhance liquidity and risk appetite, benefiting digital assets. Additionally, CryptoQuant data highlights increasing Bitcoin inflows into whale wallets, signaling a phase of accumulation by large investors, possibly positioning for a future rally.

Gold’s Rally Strengthens Amid Market Volatility

While Bitcoin struggles, Gold has continued its strong upward momentum, gaining 37% over the past year and now approaching $2,800 per ounce. The metal’s year-to-date performance has nearly doubled that of the S&P 500, underscoring its appeal as a safe-haven asset. If the Federal Reserve signals further rate cuts, Gold could break its all-time high, as lower interest rates typically drive investors towards non-yielding assets like precious metals.

How Will Bitcoin and Gold Move Amid Dovish US Fed Monetary Policy Outlook?

Fed Policy and Market Impact

The upcoming FOMC meeting is crucial, with President Trump advocating for immediate rate cuts. However, given persistent inflationary concerns, Fed Chair Jerome Powell may adopt a measured approach. The Fed’s recent rate reductions in late 2024, totaling 75 basis points, set the stage for potential additional cuts in 2025. Any dovish signals could trigger renewed buying in both Bitcoin and Gold, shaping market trends for the coming months.

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