The Bitcoin price is currently clocking in at $62,200 and is therefore leaning on a crucial support in the four-hour chart. From Monday April 8, this line formed a resistance for the bulls, but this weekend Bitcoin confidently broke through that resistance. Now there is a “moment of truth” – can Bitcoin convert this resistance into support and what will it take?
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Crucial moment for Bitcoin
We can currently speak of a crucial moment for the Bitcoin price. After the bullish momentum of the past few days, which was fueled by some favorable macroeconomic developments, we have now reached a tipping point for the price.
If the bulls manage to defend this price in the coming hours and jump higher, then we can probably conclude that the worst is behind us. This does not alter the fact that it remains important to continue to look at the macroeconomic picture.
To prove this, we just have to look at the graph below. Here we see the development of the Bitcoin price versus the expected interest rate policy of the US central bank in December 2024 (orange line).
Last week, US interest rates shot down on Wednesday after the chairman of the US central bank (Federal Reserve) indicated that a interest rate reduction is probably the next step for its central bank.
In doing so he took a lot of fear out of the market. Many analysts had expected the Fed chairman to take very strict action as inflation in America suddenly started to rise again during the first three months of 2024.
To top off the bullish flare, there was news on Friday that the US labor market is somewhat weaker than expected. This increased optimism about rapid interest rate cuts (decreasing orange line) and the Bitcoin price shot up further.
Interest rates are now normalizing somewhat (orange line is climbing) and the pressure on the Bitcoin price is increasing. This is clearly visible in the graph above. In that respect, it is important not to blindly start on the crucial line in the four-hour chart.
It is important that the Bitcoin price remains above that line of ~$62,000, but macroeconomic developments are also crucial at the moment.
Macroeconomic Tipping Point: Will This Determine 2024 for Bitcoin?
Right now we are in a scenario where inflation is accelerating, economic growth in America is slowing and unemployment is rising. There is certainly no gigantic danger of recession yet and the stagflation stories are also a bit premature.
That does not alter the fact that it is certainly a possibility that we will end up in an economic crisis later this year. This makes it extremely difficult for the US central bank to make choices.
Rising inflation requires higher interest rates, while slowing economic growth and higher unemployment require lower interest rates. What will the US central bank do?
That is a very difficult issue at the moment and it is crucial for the further development of the Bitcoin price in 2024. Would you like to know more about these types of topics and delve into them with me? Then subscribe to my newsletter for free!
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Source: https://newsbit.nl/bitcoin-koers-op-cruciale-steun-blijft-de-markt-bullish/
