While Bitcoin and major altcoins are stable at the time of writing, the sharp liquidation from the weekend through August 5th has caused a major shakeout. Billions of leveraged positions have been liquidated, and prices are under technical pressure despite the current stability.
Global Liquidity Expected to Rise Rapidly: Will Bitcoin Benefit?
However, even with the risk that Bitcoin, Solana, Ethereum and other coins could fall to support levels for several weeks, one analyst at X Believes The market is ripe for recovery.
He explained in a post on a website that the US Federal Reserve, the central bank, is planning to change its monetary policy in the coming weeks, which automatically means starting to print money.
While the crypto community had expected the Fed to begin cutting interest rates, which are currently at multi-year highs, the decision to delay means that prices are still higher than expected.
At the moment, the US Federal Reserve is likely to Interest rates are expected to be cut to 5% at the next FOMC meeting, which is He was appointed The analyst also said that the Fed will begin buying back Treasury bonds when that happens. Through this initiative, the government will pump about $30 billion into the economy every month.
Lower interest rates and the repo program would significantly boost global liquidity. Historically, and especially in the events of 2020 to 2021, when governments around the world intervened to mitigate the impact of the Covid-19 virus, global liquidity rose sharply.
At the same time, Bitcoin and cryptocurrency prices surged to multi-year highs. Specifically, investors turned to Bitcoin during this period, citing its inherent scarcity and the currency’s potential to retain its value.
At the moment, global liquidity is now in Over $106 trillion. He. She Bitcoin price is expected to continue rising, which is positive for Bitcoin and other liquid but deflationary digital assets.
Beware: Bitcoin Finds Support at $50K
However, traders should be careful. Bitcoin remains volatile, and no tool can accurately predict when prices will drop.
Immediate support is at $50,000, which is a rough figure. However, if there is a recovery and the price rises above $60,000, it could encourage bulls to double down, recharging exhausted buyers.
Even amidst this turmoil, institutions are confident in Bitcoin’s prospects. Following MicroStrategy’s lead, Semler Scientific Buyer $6 million worth of bitcoin on August 5. The company has owned 929 bitcoins since it started buying in May 2024.
Featured image from Canva, chart from TradingView
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