As global economic uncertainty looms, Bitcoin (BTC) has seen increased volatility and struggles to maintain its foothold above critical resistance levels it lost over the past month. The largest cryptocurrency in the market remains in a precarious position, but emerging signs could bode well for Bitcoin’s price and the broader crypto ecosystem.
Fed Rate Cuts Signal Hope for Bitcoin Recovery
One promising development is the possibility that the US Federal Reserve will cut interest rates again later this year. According to According to market expert Walter Bloomberg, Goldman Sachs Asset Management expects the Federal Reserve to implement a series of three consecutive interest rate cuts of 25 basis points in September, November and December.
In a recent report, Goldman Sachs macro strategist Gurpreet Garwal suggested that a weaker labor market, as indicated by the upcoming August jobs report, could prompt the Fed to adopt a more aggressive approach, perhaps starting with a 50 basis point rate cut.
Financial markets are currently pricing in a 100 basis point rate cut this year, according to Refinitiv. That outlook is in line with comments from Federal Reserve Chairman Jerome Powell last week, who struck a dovish tone, suggesting the central bank is open to further rate cuts to address signs of a slowdown in the labor market. Such a stance is generally seen as positive for risk assets, including bitcoin.
The anticipation of a rate cut had an immediate impact on the price of bitcoin, which surged to a one-month high of $65,000 late last week. However, the ongoing volatility caused the price of bitcoin to fall to $57,900 on Wednesday, but it has since recovered and is trading above $60,000.
Analyst warns of possible price corrections in the future
Despite Bitcoin’s recent rebound above $60,200 on Friday, analysts are warning investors of further price declines as the largest cryptocurrency still shows no signs of strong catalysts.
Cryptocurrency analyst Ali Martinez has It has been identified. A sell signal on the hourly chart of Bitcoin using the TD Sequential indicator, indicating that another price correction may be on the horizon.
With this in mind, the $58,000 level has already proven to be a major support level for the cryptocurrency this week. If broken, another major support level in the near term would be the $57,200 level, as shown on the daily chart of the BTC/USDT pair below.
However, if this scenario happens, the overall overall range of the token will remain intact as this has been part of BTC’s price consolidation between $57,000 and $70,000 over the past six months after correcting from its all-time high of $737,000.
Featured image by DALL-E, chart by TradingView.com
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