Bitcoin Potential – Bitcoin (BTC) faces a potential decline to the $54,000 range, but bullish sentiment is bolstered by the possibility of the Federal Reserve cutting interest rates.
Panji Yudha, an analyst at Ajaib Kripto, has indicated that Bitcoin’s price might weaken to $54,000-$55,000. He also highlighted how recent developments in the U.S. economy indirectly affect global crypto market sentiment.
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Technical Analysis and Market Sentiment of Bitcoin Potential
Panji Yudha’s analysis, based on data as of Thursday, July 11, 2024, at 09:30 WIB, reveals that Bitcoin has a chance to test the $60,000 resistance if it maintains above $57,000. However, if it falls below this level, it could drop to $54,000-$55,000. This projection takes into account the latest U.S. inflation data, which significantly impacts global crypto market sentiment.
Panji emphasized that if inflation figures exceed market expectations, Bitcoin might face negative pressure. Conversely, if inflation aligns with or is lower than forecasts, it could have a positive impact on Bitcoin and the broader crypto market.
Impact of U.S. Inflation Data on Bitcoin and Other Cryptocurrencies
Despite dipping below $55,000 on Monday, July 8, 2024, Bitcoin (BTC) showed signs of recovery, reaching $59,469 on Wednesday, July 10, 2024. As of Thursday, July 11, 2024, BTC was trading at $57,946. By Friday night, Bitcoin had dropped 2.5% in a day, trading around $57,236.
The past week has been turbulent for the crypto market, driven by Bitcoin sales by the German government and concerns over the distribution of returns to creditors of the defunct Mt. Gox exchange. These events have added to market anxiety.
However, Panji noted that the bullish outlook for Bitcoin is supported by macroeconomic factors. Federal Reserve Chairman Jerome Powell stated on Tuesday, July 9, 2024, that maintaining high interest rates for too long could hinder economic growth. This suggests that the central bank might consider easing its policy, potentially cutting the benchmark interest rate.
Following Powell’s statement, the probability of a 25 basis point (0.25%) rate cut by the Fed at the September 18, 2024, FOMC meeting increased to 70%. If enacted, the benchmark interest rate would be 5.00%-5.25%. The Fed is expected to hold rates steady at the July 31, 2024, FOMC meeting, according to the CME FEDWatch tool.
ETF Inflows and Market Recovery
Bitcoin’s recovery has also been driven by the trading of Bitcoin Spot ETFs in the U.S. According to SoSo Value data, from Monday, July 8, 2024, to Wednesday, July 10, 2024, these ETFs recorded inflows of $654.3 million in just three trading days.
The market is also closely watching the release of U.S. inflation data, beginning with the Consumer Price Index (CPI) on Thursday, July 11, 2024. The CPI is expected to be 3.1% year-over-year (YoY), lower than the previous period’s 3.3% YoY. The Producer Price Index (PPI) report on Friday, July 12, 2024, is anticipated to remain at 2.2% YoY, unchanged from the prior period.
Market Implications and Future Projections
The interplay between technical analysis, macroeconomic factors, and market sentiment paints a complex picture for Bitcoin’s short-term future. While there is a risk of Bitcoin declining to the $54,000-$55,000 range, several factors could mitigate this downside:
- Federal Reserve’s Interest Rate Decisions: Potential rate cuts could provide a bullish impetus for Bitcoin and other cryptocurrencies. Lower interest rates typically boost risk-on assets, including cryptocurrencies.
- ETF Inflows: Significant inflows into Bitcoin Spot ETFs indicate robust institutional interest, which can drive prices higher.
- Inflation Data: Favorable inflation data could alleviate market concerns and support Bitcoin’s price recovery.
In summary, Bitcoin’s near-term outlook hinges on several factors, including technical resistance levels, macroeconomic developments, and institutional investment trends. While the potential for a decline to $54,000 exists, the broader context suggests that Bitcoin could also experience significant upward momentum if the conditions align favorably. Traders and investors should monitor these developments closely to navigate the evolving market landscape.