Bitcoin (BTC) climbed above $84,000 immediately, extending its upward momentum amid a broader rally in threat belongings. The rally coincided with one other constructive day for U.S. shares, offering a positive backdrop for cryptocurrencies.
Regardless of the bullish worth motion, some analysts stay cautious. Joel Kruger, strategist at LMAX Group, warned that the month-to-month chart of the S&P 500 is pointing to a possible correction in U.S. equities, which might negatively influence cryptocurrencies.
“Given the state of world commerce tensions and considerations a few slowdown within the U.S. economic system, there’s concern that shares might fall additional at a time when it’s more and more unclear how far more lodging the Fed can present,” Kruger stated.
Kruger additionally famous that if there’s a broader correction available in the market, Bitcoin might return to its March 2024 highs of round $73,000-$74,000.
Traders are intently watching this week’s Federal Open Market Committee (FOMC) assembly, with expectations that the Fed will preserve rates of interest at present ranges. Nonetheless, analysts are awaiting potential adjustments to the central financial institution’s quantitative tightening (QT) program that would influence market liquidity.
David Duong, director of analysis at Coinbase Institutional, instructed that the Fed might pause or finish the QT program as financial institution reserve ranges method the 10-11% of GDP threshold deemed vital for monetary stability.
Duong attributed the latest crypto sell-off to macroeconomic considerations and worsening liquidity circumstances. Nonetheless, he believes that these circumstances might enhance within the coming quarters and supply some assist for asset costs.
“Cryptocurrency costs might discover bottoms within the subsequent few weeks earlier than hitting new highs later this yr,” Duong stated.
*This isn’t funding recommendation.
