The price of bitcoin (BTC) has fallen slightly from recent highs, but some analysts believe that losses can be recovered after the expected decrease in US interest rates by 25 basis points on Wednesday, writes Omkar Godball of Coindesk.
Nigel Green, the founder and CEO of the consulting company deVere Group, believes that cryptocurrency can demonstrate growth in response to the Fed rate cut.
Bitcoin will get a healthy price boost from the Fed this week: deVere CEO https://t.co/E7X7ygD0CB via @valuewalk
– Nigel Green (@nigeljgreen) September 16, 2019
Anthony Pompliano, founder and partner of Morgan Creek Digital Assets, said in August that the price of bitcoin could rise sharply if a quantitative easing program follows a cut in the Fed rate.
Max Kaiser, a former trader and journalist for The Wall Street Journal, also believes that further easing of the Fed's monetary policy will lead to an increase in bitcoin prices to $ 100,000.
Max Keiser: Fed's Endless Printing Press And Negative Interest Rates Will Launch Bitcoin to $ 100,000 https://t.co/4snGROCLC2
– Max Keiser, tweet poet. (@maxkeiser) August 14, 2019
Lower rates lead to inflation, which means a decrease in the purchasing power of fiat currencies. Therefore, in the cryptocurrency market, there is a generally accepted opinion that easing the Fed's monetary policy will become a good sign for bitcoin, which is a deflationary asset and expects a reduction in remuneration for mining ( halving ) in less than a year.
Bitcoin, however, rarely reacted to Fed actions in the past. The Fed raised rates by 25 basis points in December 2015. This was the first increase since 2006. Then there was another rate increase in December 2016 and four in 2017. However, at the end of October 2015, bitcoin grew above $ 300, and by December 2017 reached a historic high of $ 20,000.
Thus, the likelihood that the price of Bitcoin will respond positively to tomorrow's rate cut is quite controversial.
Traditional markets have already estimated a rate cut of 25 basis points, and foreign exchange markets are likely to drop the US dollar only if the Fed cuts rates by 50 basis points or reports a weakening in the near future. In this case, anti-dollar sentiment can affect the cryptocurrency market.
At the moment, the price of bitcoin is on the support of the uptrend line at the level of $ 10 120. A break below will further strengthen the position of the bears in the market, therefore a deeper fall to $ 9 855 is possible.
On the other hand, the bearish high of $ 10,956 (August 20) remains the level that bulls need to pass. This level will become possible in the event of a price rebound from upward support above $ 10,458 (Friday maximum).
The probability of a local break down is high, since the break of the downward wedge last week on the 4-hour chart (top right) could not meet the bulls' expectations. In fact, the breakthrough ended with another bearish high of $ 10,458.
Publication date 09/18/2019
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