Following the announcement of the most anticipated rate cut of the year, Bitcoin quickly crossed over the $63,000 level. Fed Chair Jerome Powell announced that the central bank will cut interest rates for the first time in four years. Market experts believe this news could propel Bitcoin to new heights!
A 0.5% Rate Cut!
Although a 25 basis point reduction was expected, there was a 50 bps cut, indicating a bold strategy to relax monetary policy, which aligns with the investors’ hopes for quick action amidst the economic uncertainty.
Powell announced that the US’ central bank will cut interest rates by 0.5%, bringing them to a range between 4.75% and 5%. Bitcoin going over its previous $73,000 record will likely propel the rest of the $2.2 trillion crypto industry. However, there is uncertainty around the US elections, which might jeopardize the potential rally.
Robert Kiyosaki, a prominent Bitcoin advocate, in a previous X post had mentioned that the Bitcoin, gold, and silver prices are about to explode following the Fed’s rate cuts.
He remarked that “the real assets could go up in price as fake money leaves fake assets and flee to real assets like real estate, gold, silver, and Bitcoin.”
Crypto Market Rallies
The crypto market rallied 2% to just $2.2 trillion due to the much-awaited announcement. Ether bounced over 5% to $2,435 over the past 24 hours, while SOL surged over 6% to $138. The reduced interest rates and borrowings getting cheaper could prompt investors to buy high-risk assets like stocks and crypto.
As the broader crypto market rose with Bitcoin, it also triggered substantial liquidations. Derivatives crypto traders have seen $204.3 million worth of contracts forced to liquidate in the past 24 hours, of which $130.5 million were short positions, while $73.8 million were from longs, implying a market tilt as prices surged.
What Could Hold The Potential Rally?
Several factors could overturn the potential rally, even before it gets some momentum. The major one being the upcoming US elections. According to Bernstein analysts, a Trump win will drive Bitcoin to as high as $90,000 this year, and the cryptocurrency could fall to as low as $30,000 if Trump does not win.
Greg Magadini, director of Derivatives at Amberdata stated “While elections may create regulatory headwinds, monetary policy is providing tailwinds, making Bitcoin the most likely winner.”
$60,000: A Critical Background
The CEO of Pi42, Avinash Shekhar noted that a tug of war has been created between bulls and bears as the short-term holders are selling from August, signaling a potential price bottom, while long-term holders are maintaining support above $60,000.
He said that the $60,000 level is a critical battleground and that “a high above $62K could steer in bullish momentum, while a breakdown below $60K could extend selling pressure.”
Also Check Out: Is Crypto Bull Run Imminent? What’s Next After the FED’s Interest Rate Cut?
What do you think? Will Bitcoin soon achieve its new all-time high or the looming headwinds could impede its growth? Stay tuned to know more.
