Will the price of Bitcoin recover after the Federal Reserve rate reduction?
Bitcoin has come out of an increasingly narrow price range and can see a deeper fall if the support of the key trend line is violated near $ 10,120.
Acceptance below $ 10,120 would expose the recent minimum of $ 9,855.
Some notable observers believe that the decline can be reversed after the Federal Reserve rate cut scheduled for Wednesday, although historical data suggests otherwise.
On the upper side, $ 10,956 (maximum of August 20) remains the level to beat for the bulls.
Bitcoin has fallen again, but some observers believe that losses could be reversed after a US interest rate cut. UU. I planned for this Wednesday.
The leading cryptocurrency by market value fell to lows below $ 10,100 yesterday, marking a downward breakdown of the narrowest price range created near $ 10,300 in the three days until September 15.
At the time of writing, BTC is changing hands to $ 10,150 in Bitstamp, representing a drop of 1.4 percent 24 hours.
Therefore, bears have gained an advantage in the last 24 hours despite record miners’ confidence, and a deeper fall may develop in the next 24 hours.
However, the decline could end up trapping sellers on the wrong side of the market, according to some observers, who expect BTC to benefit from an impending rate cut of 25 basis points as of Wednesday.
For example, Nigel Green, founder and CEO of a global financial advisory group of the Vere Group, believes that the cryptocurrency will pick up a strong offer in response to the Federal Reserve rate cut, as the reduction in loan costs will reduce the yield or return in the US dollar.
Meanwhile, Anthony Pompliano, founder and partner of Morgan Creek Digital Assets, tweeted in August that BTC could fly high if the Fed’s rate cuts are followed by a government procurement program that is nothing more than the so-called quantitative easing.
The rate cuts are of an inflationary nature, which means that they reduce the purchasing power of fiat currencies.
Therefore, there is a general consensus in the cryptocurrency market that the monetary easing of the Federal Reserve will be a good omen for Bitcoin, which is deflationary in nature and is expected to reduce the mining reward, cut by Supply in less than a year.
However, Bitcoin has rarely taken signals from Fed actions in the past. For example, the Fed raised rates by 25 basis points in December 2015. That was the first increase since 2006. The Central Bank delivered another rate increase in December 2016 and raised rates four times in 2017.
Even so, BTC entered a bull market with a convincing move above $ 300 at the end of October 2015 and reached a record $ 20,000 in December 2017.
As such, the probability of BTC responding positively to tomorrow’s rate cut is debatable.
In addition, traditional markets have a price cut-off rate of 25 basis points and currency markets will likely overturn the US dollar only if the Federal Reserve reduces rates by 50 basis points or indicates aggressive easing in the short term. In that case, anti-dollar sentiment can feed the crypto markets.
Bitcoin fell to $ 10,060 on Monday, indicating a downward break in the increasingly narrow price range of consecutive internal bar candles, as discussed yesterday.
As of now, prices are in support of the upward trend line at $ 10,120. A lower break would further strengthen the bear’s grip and allow a deeper fall to $ 9,855.
On the upper side, the bearish high is $ 10,956 created on August 20 is still the level to beat for the bulls.
That level could come into play if the growing support of the trend line fuels a price rebound above $ 10,458 which was Friday’s high.
The probability of a breakdown is high, since the breakdown of the wedge that fell last week in the available information indicates that it failed to attract offers. In fact, the breakup ended up creating another maximum downward point at $ 10,458.
The monetary policies of the federal reserve have a great impact on the decision making of investors, the traditional economy will react in an unforeseen way, when quantitative easing is announced openly, blockchain-bitcoin technology is designed to take positions Regarding, the cryptocurrency is a safe haven.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.