On Wednesday morning, the price of bitcoin dropped below $60,000 as markets braced for the Federal Reserve’s upcoming announcement of interest rate cuts – the first in four years.

“The consensus, based on various analyses and market sentiments, leans towards a 25-basis point cut at the upcoming Federal Open Market Committee (FOMC) meeting," Brian Dixon, CEO of OTC Capital, told TheStreet Crypto. "However, there's a notable discussion around the possibility of a 50-basis point cut, reflecting uncertainty about the Fed's response to recent economic data.”

Although the Federal Reserve’s announcement is expected to be a major event for crypto markets, bitcoin's price is currently trading slightly below $60,000 at the time of writing. This represents a notable uptick from last week, when the world’s largest cryptocurrency saw its worst performance since early August.

Last Friday, the price of bitcoin plunged below $54,000 after U.S. Labor Department data showed weak hiring.

Although this month’s U.S. jobs forecast was expected to see around 160,000 jobs created, data from the U.S. Labor Department revealed that only 142,000 employment opportunities were generated – a deficit of 18,000 positions – signaling weaker economic performance for the U.S.

Moreover, a weak jobs report is correlated with the increased possibility of the Federal Reserve slashing interest rates. This might create conditions for a weaker U.S. dollar, which would potentially make riskier assets like cryptocurrency more attractive to investors. Moreover, the economic uncertainty associated with the underperforming jobs report might catalyze some investors to increase their holdings of bitcoin as a hedge against market volatility. With bitcoin’s ongoing perception as an inflation hedge, however, it remains to be seen how this pans out.

Despite recent volatility, some analysts remain optimistic about bitcoin's prospects. “Bitcoin recently dipped below $59,000, but is showing signs of recovery, with some analysts predicting it could aim for $90,000 by year end," Dixon told TheStreet Crypto. "This volatility may be attributed to market anticipation around potential Federal Reserve rate cuts, signaling a dovish monetary policy that could benefit risk assets like bitcoin.”