Digital asset markets showed a slight recovery following the Federal Reserve’s expected rate cut this Wednesday. Jeff Ko, analyst at CoinEx, explains that Bitcoin price behavior reflects a technical liquidity maneuver, although he warns about the moderately bullish interpretation that institutional and retail investors have taken during the last few hours of trading.
The US central bank has executed its third consecutive rate cut, totaling 0.75% between September and December of this year. This monetary strategy seeks to reduce borrowing costs in the short term, historically incentivizing capital flow into risk assets and generating immediate volatility followed by sustained recoveries in the valuation charts of major assets.
On the other hand, firm Santiment highlights that each reduction has triggered initial sell-offs under the “buy the rumor, sell the news” pattern. However, data suggests that there is a predictable bounce once the dust of volatility settles, offering strategic opportunities for those traders who know how to identify the end of retail selling pressure or unjustified fear.
Despite the mixed initial reaction, the asset managed to recover from a drop below $90,000 to touch $93,500 momentarily. This movement validates the thesis that markets interpret the $40 billion Treasury bond purchases as a mildly bullish signal, helping the coin stage a rebound alongside the general risk sentiment of stocks.
Likewise, Jurrien Timmer, director of global macro at Fidelity Investments, offered a perspective on the current cycle’s maturity compared to previous years. The expert suggests that the evolving wave structure of the network shows a quite mature bull market, although he acknowledges that the asset has underperformed against traditional stock exchanges this year, raising doubts about future correlation.
Will the asset be able to overcome technical resistance and maintain the positive trend?
Currently, resistance at the $93,500 level has proven to be too strong, returning the quote to the $92,300 zone at the time of this report. Traders must watch if retail fear diminishes, as a reduction in selling pressure could confirm that the post-cut bearish trend has ended, opening the door to new annual highs in the short term.
Finally, the environment of lower rates and reduced borrowing costs generally increases risk appetite in cryptocurrency markets. It is expected that this macroeconomic scenario favors an entry of speculative capital in the coming weeks, allowing Bitcoin price behavior to consolidate its recovery and seek to definitively break the psychological barriers that have halted its recent advance.
