JOHANNESBURG, SOUTH AFRICA – Media OutReach Newswire – February 1, 2024 – FBS analysts predict an imminent slowdown for Bitcoin as market participants await the Federal Reserve’s next key rate cut in 2024. This trend signals the increasing likelihood of a final uptrend in BTCUSD, as rate hikes frequently influence risky assets such as Bitcoin.
Bitcoin
The Federal Reserve’s policy rate, a key factor determining the minimum interest rate for interbank lending, plays an important role in shaping the financial landscape. Market participants have observed a correlation between peaks in Federal Reserve interest rates and declines in risk assets, including Bitcoin.
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FBS Analysts review Bitcoin’s behavior from 2017 to 2020, they highlight a remarkable 370% rise in early 2019 to $13,000 or the 61.8 Fibonacci level, following public anticipation of rate cuts. However, the trend reversed as rates began to fall, leading to a decline in BTCUSD.
The 2021-2024 scenario saw the Federal Reserve raising interest rates to combat inflation. Despite initial expectations that such rate hikes would dampen demand for risky assets, the value of Bitcoin has surprisingly increased. Market dynamics changed after the Fed announced a pause in rate hikes in September 2023, with markets anticipating a rate cut soon.
Looking at financial market trends for 2024, FBS analysts point out the striking similarities to Bitcoin’s 2017-2020 pattern. They mainly highlight that BTCUSD reached the 61.8 Fibonacci level at around $49,000 and subsequently rebounded, coinciding with market expectations of a possible rate cut by the Federal Reserve.
Given the substantial parallels with the past, FBS analysts predict a decline in Bitcoin price towards the USD 36,000 target after the first Fed rate cut in 2024. Additionally, if BTCUSD loses this support, it could drop as low as $31,000 or even $25,000.
This scenario highlights a crucial aspect often overlooked in market cycles. Although a reduction in policy rates is expected to have a positive impact on the prices of risky assets like Bitcoin, it is imperative to recognize the fundamental factor that such reductions typically occur in the face of a economic stagnation and slowing growth, leading to panic selling and the sale of risky assets. assets.
Disclaimer: This material does not constitute a call to trade, trading advice or recommendation and is intended for informational purposes only.
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