Bitcoin Price Rally Predicted Ahead of Fed Rate Cuts on April 1 by Arthur Hayes
Following the FOMC meeting, Bitcoin’s price rose by 3.5% amid forecasts of Federal Reserve interest rate cuts starting April 1. Arthur Hayes suggests this cut, alongside potential increases in liquidity, could significantly boost Bitcoin’s value. However, Benjamin Cowen disputes the timing of QT’s conclusion, asserting that reductions in the Fed’s balance sheet are still ongoing.
In light of the recent Federal Open Market Committee (FOMC) meeting, Bitcoin’s price has experienced a notable uptick, increasing by 3.5%. Expectations are set for Federal Reserve rate cuts to commence on April 1, which could significantly impact liquidity levels. Analysts emphasize that even a modest increase in liquidity could potentially more than double Bitcoin’s value.
Arthur Hayes, former CEO of BitMEX, indicates that the recent decline in Bitcoin to approximately $77,000 might represent the cryptocurrency’s bottom. He suggests that the conclusion of quantitative tightening (QT) by the beginning of April could catalyze bullish momentum, provided there are adjustments to financial regulations or the resumption of quantitative easing (QE).
Hayes warns that continued corrections in the U.S. equity market may pressure Federal Reserve Chair Jerome Powell to adopt more accommodating fiscal policies. Amid political discussions, former President Donald Trump has advocated for rate cuts, linking monetary policy to economic recovery: “The Fed would be MUCH better off CUTTING RATES…”.
Post-FOMC, Bitcoin demonstrated robust recovery, reaching up to $87,000. Notably, for Bitcoin to sustain an upward trajectory, it must surpass the diagonal resistance at $86,351. In tandem with this, the M2 money supply is on the rise, which typically correlates with Bitcoin price increases. A mere 10% liquidity boost could foreseeably result in a significant increase in Bitcoin’s market value.
Alongside Bitcoin, altcoins such as Ethereum, XRP, Solana, and Dogecoin have also shown impressive rebounds, further indicating positive market sentiment following the FOMC meeting. While some analysts posit that the Federal Reserve may reconsider its stance on QT due to economic pressures, Benjamin Cowen, a prominent crypto analyst, maintains skepticism regarding the conclusion of QT by April 1. He asserts that the reduction of the Federal Reserve’s balance sheet is still very much in progress.
Overall, market dynamics suggest a potential bullish environment for Bitcoin and altcoins if liquidity increases as Hayes predicts, alongside prolonged momentum from favorable monetary policies.
In summary, the cryptocurrency market is anticipating favorable changes following the FOMC meeting, particularly with predicted Federal Reserve rate cuts beginning on April 1. Arthur Hayes posits that Bitcoin may be approaching a market bottom, while analysts highlight the profound impact that fluctuations in liquidity can have on Bitcoin’s price. The performance of altcoins indicates a broader market recovery, even amidst ongoing debates regarding the future of QT. It remains to be seen how the Federal Reserve’s policies will shape the market going forward.
Original Source: coingape.com
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