Bitcoin has settled around $86,650 following a volatile trading day, while former U.S. President Donald Trump publicly stated that the incoming Federal Reserve Chair will cut rates “by a lot.” The Fear & Greed Index sits at an extreme‑fear level of 16, underscoring heightened market anxiety.

What Happened

During the session, Bitcoin’s price hovered near $86,650, moving only modestly after a sharp dip earlier in the day. The market reaction to Trump’s comments was muted, with the cryptocurrency largely unchanged.

Why It Matters for Bitcoin

Fed rate expectations are a key driver of risk sentiment. A significant rate cut could lower borrowing costs, potentially boosting speculative activity and supporting higher asset prices, including Bitcoin. Conversely, uncertainty around the Fed’s policy direction often leads to volatility in the digital‑currency market.

Market Impact

Despite Trump’s remarks, Bitcoin’s price remained stable, suggesting that traders are waiting for clearer signals from the Fed. The extreme‑fear reading on the Fear & Greed Index indicates that risk appetite is low, which could keep volatility in check for the short term.

What to Watch Next

  • Official announcement of the new Fed Chair and any accompanying policy statements.
  • Central bank minutes and speeches that hint at future rate paths.
  • Bitcoin’s on‑chain metrics for signs of changing investor sentiment.
  • Any regulatory developments that could affect market confidence.

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Source

Source: The Block