Analysts Predict End of Bitcoin Consolidation as Fed Rate Cut Approaches

Cryptonews John Brightwater September 18, 2024

Analysts Predict End of Bitcoin Consolidation as Fed Rate Cut Approaches

Summary
Bitcoin is predicted to breakout after months of sideways trading, with analysts displaying renewed optimism as the Federal Reserve is expected to cut interest rates. The market has shown resilience with only a modest decrease from its all-time high, and a substantial rate cut could bolster high-risk assets like cryptocurrency. However, uncertainty surrounding the Fed’s actions may temper expectations among traders.

Bitcoin has been experiencing a period of consolidation since March, navigating sideways during the third quarter, which has historically been marked by bearish trends. As September draws to a close, analysts are regaining optimism, anticipating a significant breakout for Bitcoin (BTC) and the broader cryptocurrency market. Notably, on September 18, the analyst known as ‘RamenPanda’ remarked that, despite the protracted sideways trajectory lasting six months, the price of Bitcoin remains only 18% below its all-time high, currently reclaiming the $60,000 mark. RamenPanda suggested that the extended period of price stabilization will ultimately culminate in a substantial rally, stating, “If you think we won’t have a world shocking of a rally next, you are fking delusional. All that time spent in sideways will be compensated by upward momentum.” Concurrently, economist Alex Krüger pointed out a notable decline in sentiment among cryptocurrency traders, which has not been this low since 2022, while also highlighting Bitcoin’s consistent trading level compared to six months prior. On September 17, Charles Edwards, founder of Capriole Fund, indicated that investors have now weathered the most challenging phase for Bitcoin, emphasizing the typical pattern of a bearish Q3 followed by a bullish Q4. This sentiment was mirrored by analyst ‘Income Sharks’, who also forecasted a significant upward shift in the coming months. Bitcoin had touched $61,000 shortly before a slight retraction to around $60,500 during the Asian trading session on September 18. Despite this, the asset demonstrated resilience, posting a weekly gain of 6.7% after emerging from September’s lows. Looking forward, the Federal Reserve is anticipated to enact a rate cut, with market speculations leaning towards a larger reduction; the CME Fed Watch tool currently reflects a 65% probability of a 50 basis point cut against 35% for a 25 basis point reduction. Analysts have expressed that a substantial rate cut could favor high-risk assets, including cryptocurrencies, with crypto YouTuber Lark Davis asserting, “The last time the Fed cut rates, Bitcoin went parabolic. If history repeats itself, the next 6-12 months are going to be insane.” Nevertheless, the Kobeissi Letter issued a note of caution, highlighting the unpredictability surrounding the upcoming Fed meeting, stating, “Regardless of what the Fed does tomorrow, half of the market will be disappointed.”

The discussion surrounding Bitcoin’s current market state reflects broader trends in cryptocurrency trading, particularly during traditionally volatile quarters. Analysts are observing price movements closely, as the patterns from previous trading cycles often serve as indicators for future performance. With the federal interest rate cuts looming, the cryptocurrency market may experience increased volatility and investment activity, further influenced by trader sentiment and historical behaviors following monetary policy changes.

In summary, Bitcoin’s ongoing consolidation phase is expected to give way to a pronounced rally as analysts express increasing bullish sentiment with the impending Federal Reserve interest rate cuts. As historical trends indicate, significant rate reductions may catalyze upward price movements for cryptocurrencies. Market participants remain cautiously optimistic, albeit aware of the potential for disappointment amidst the uncertainty of the Fed’s decisions. The next few months could be pivotal for Bitcoin’s trajectory as it seeks to reclaim higher price levels.

Original Source: cryptopotato.com