Bitcoin price correction extended into the weekend as price lost crucial support at the $60000 psychological level. The overhead supply on the crypto market persists due to poor employment reports, geopolitical tension in the Middle East, and fear of recession. Will BTC witness prolonged correction for the rest of August?
Fed Rate Cut Speculations May Drive Market Reversal
This week, the cryptocurrency market witnessed a notable downfall attributed to a series of adverse developments affecting the broader market. The selling pressure was initiated by Bitcoin’s reversal from $70000 resistance and escalated further in mid-week following the geopolitical tension in the Middle East and the fear of recession.
The recent poor employment report has bolstered a dovish shift in the market, raising concerns about potential rate cuts in September. According to Nick Timiraos of The Wall Street Journal, these reports could force the Federal Reserve to adjust monetary policy for stabilizing the economy.
Financial giants Citigroup and JPMorgan expect the FED to cut interest rates in a series, starting with 50 bps in September, then another 50 bps in November, and a further 25 bps in December.
Citi and JPM now expect the Fed to cut rates by 50 bps in Sept, 50 bps in Nov, 25 in Dec.
(Will update this table later today as many of these are now likely getting redrafted.) https://t.co/nuPs9Lp1Kp
— Nick Timiraos (@NickTimiraos) August 2, 2024
Moreover, data from the CME Group shows a 78% probability of a 25 bps September cut and a 22% probability of a 50 bps cut, thus further adding to market sentiments toward impending rate cuts. Additionally, JPMorgan has estimated that the Fed would cut its benchmark rate to about 3%, signaling that rate cuts could continue until Q3 2025.
The anticipated cut would bolster the borrowing environment for banks and encourage investment in riskier assets such as cryptocurrencies. Thus, the BTC price could seek suitable support at major technical levels such as 200-day EMA and $50000.
Bitcoin Price Seeks Major Support From Flag Pattern
Over the past five months, the Bitcoin price forecast shows a sideways trend resonating within the two downsloping trendlines of the flag pattern. Theoretically, this chart pattern leads to a temporary consolidation for buyers to recuperate bullish momentum for the next leap.
Amid the market correction, the BTC price fell from the flag resistance at $70000, where it also formed a double top pattern and plunged 14.84% to $59800. Consecutively, the market cap tumbled to $1.178 Trillion.
Bitcoin price hit the price target for the double top bearish reversal pattern but continued dipping lower due to increased selling pressure. Currently BTC price is at $50,171. A bearish crossover between the 20-and-50 exponential moving average indicates that sellers are strengthening their grip on this asset.
However, the Bitcoin price could rebound from the next major zone of support around $45,000, which also coincides with a fair value gap zone.
The post Will Bitcoin Price Bottom at $45k Amid Growing Speculation of Fed Rate Cut? appeared first on CoinGape.
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