Jerome Powell's recent statement has set the stage for significant shifts in the Bitcoin market. This means that the Federal reserve will...
has set the stage for significant shifts in the cryptocurrency market. Powell’s indication that “The time has come for policy to adjust” suggests that U.S rate cuts are on the horizon.
This move, combined with strong global liquidity, is expected to weaken the U.S Dollar significantly. As the USD weakens,In the short term, the Federal Reserve’s liquidity outlook remains weak though, a continuation of the medium-term downtrend that began back in April.This trend suggests that Fed liquidity could hit a new “lower low” by the end of September, potentially reaching its lowest level since March 2023.
As liquidity fades and rate cuts loom, Bitcoin’s pairing with USD becomes increasingly advantageous. Particularly as Bitcoin prepares to close its seventh consecutive monthly candle above its 2021 all-time high.The longer Bitcoin’s price consolidates above this level, the stronger the support, setting the stage for a potential breakout in September when the Fed begins its rate cuts.Bitcoin has historically been a strong performer, with over 96% of its history showing profitability for holders.
At press time, the Altcoin Speculation Index, which is at its lowest point since July 2023, indicated that altcoin prices may have bottomed out. Simply put, this index may be signalling an opportunity for growth as USD weakens.Here, it’s worth mentioning that the broader crypto market is also showing signs of recovery. The Crypto Market RSI Heatmap recently flipped from oversold to neutral, suggesting that the market may be poised for a rebound.
Daily RSI levels have crossed the 50-level too, indicating healthy momentum with room for further gains before reaching overbought territory.As the Fed moves towards rate cuts and global liquidity strengthens, the stage is set for Bitcoin and the broader crypto market to rise. This will offer potential gains for investors across the board.Lennox is a professional financial market analyst who's enthusiastic about blockchain, cryptos, and web3.
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