As global economic uncertainty looms, Bitcoin (BTC) has experienced increased volatility and is struggling to maintain its footing above critical resistance levels lost over the past month. The largest cryptocurrency on the market remains in a precarious position, but emerging signs could bode well for the BTC price and the broader crypto ecosystem.
Fed’s Rate Cuts Signal Hope For Bitcoin Price Recovery
One promising development is the possibility of further interest rate cuts by the US Federal Reserve (Fed) later this year. According to market expert Walter Bloomberg, Goldman Sachs Asset Management anticipates that the Fed will implement a series of three consecutive 25-basis point rate cuts in September, November, and December.
Gurpreet Garewal, a macro strategist at Goldman Sachs, noted in a recent report that a weak labor market, as indicated in the upcoming August jobs report, could even prompt the Fed to adopt a more aggressive approach, potentially starting with a 50-basis point cut.
Currently, money markets are pricing in a total of 100 basis points of rate cuts for the year, as reported by Refinitiv. This outlook aligns with comments made by Fed Chair Jerome Powell last week, who adopted a dovish tone, suggesting the central bank is open to further rate reductions to address signs of cooling in the labor market. Such a stance is generally seen as positive for risk assets, including Bitcoin.
Anticipation of the rate cut had an immediate impact on the Bitcoin price, which surged to a one-month high of $65,000 late last week. However, continued volatility caused the BTC price to fall back to $57,900 on Wednesday, but it has since recovered and is trading above $60,000.
Analyst Warns Of Potential Price Corrections Ahead
Despite Bitcoin’s recent rebound above $60,200 on Friday, analysts are warning investors to keep an eye out for further price declines as the largest cryptocurrency still shows no signs of strong catalysts.
Crypto analyst Ali Martinez has identified a sell signal on the Bitcoin hourly chart using the TD Sequential indicator, suggesting that another price correction could 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 breached, the other major support level in the near term would be the $57,200 level, as seen on the daily BTC/USDT chart below.
However, should this scenario play out, the token’s overall macro range would remain intact as this has been part of BTC’s price consolidation between $57,000 and $70,000 for the past six months following the correction from all-time highs of $73,7000.
Featured image from DALL-E, chart from TradingView.com
Source:newsbtc.com
