This weekend, the Bitcoin price shot above the $60,000 level. The weekend is now over and BTC is trading below $59,000 again. In the meantime, tensions are rising, because next Wednesday the American Federal Reserve will lower the interest rate for the first time this cycle.
Red start of the week
Bitcoin has started the week in the red as the market suddenly expects a 0.50% rate cut from the Federal Reserve.
Until last week, the expectation was that the US central bank would start with a modest interest rate cut of 0.25%. That has changed after this weekend. It also seems that more and more investors are worried about a recession in the United States.
Mark Cullen (see tweet above) expects the Federal Reserve to come up with a 0.50% rate cut, but then Fed Chairman Jerome Powell will give a speech that will calm and quiet the markets again.
Initially, however, the choice for a 0.50% rate cut could cause panic. That was not the plan, and that of course means that the Federal Reserve is secretly worried about the health of the American economy.
For preventing a recession, the choice for a 0.50% cut is probably the best, but not for the sentiment on the market. The market benefits from calm and confidence. That will no longer be the case for a short while if the Federal Reserve also starts sounding the alarm bells with a 0.50% cut.
Key Support Points for Bitcoin
Looking at the technical picture, Bitcoin seems to be getting support from two important moving averages. These are the 365-day moving average and the exponential moving average.
“Since its initial breakout in March and April 2023, Bitcoin has managed to stay above its 365-day moving average and acted as support for the price on multiple occasions, including during the most recent pullback in August and September,” writes Caleb Franzen of Cubic Analytics.
“Could it be that Bitcoin is simply testing its 365-day moving average before prices continue to rise, as we saw in Q2 and Q3 2023? Until proven otherwise, the answer to that question is yes!” Franzen said.
Either way, a crucial phase has arrived for Bitcoin. The coming weeks will show whether the bull market will continue. Do you still believe in new all-time highs for Bitcoin in 2024 or 2025?
Source: https://newsbit.nl/bitcoin-koers-daalt-terwijl-verwachting-renteverlaging-federal-reserve-plots-naar-050-stijgt/
