The post Bitcoin Surges Past $62,000 After Fed Announces Rate Cut; Potential Rally Ahead? appeared first on Coinpedia Fintech News
Following the announcement of the most anticipated rate cut of the year, Bitcoin quickly managed to cross over the $62,000 level. Fed Chair Jerome Powell announced that the central bank will cut interest rates for the first time in four years. Market experts believe this news could propel Bitcoin to newer heights!
A 0.5% Rate Cut!
Although a 25 basis point reduction was expected, there was a 50 bps cut, indicating a bold strategy to relax monetary policy, which aligns with the investors’ hopes for quick action amidst the economic uncertainty.
Powell announced that the US’ central bank will cut interest rates by 0.5%, bringing them to a range between 4.75% and 5%. Bitcoin going over its previous $73,000 record will likely propel the rest of the $2.2 trillion crypto industry. However, there is uncertainty around the US elections, which might jeopardize the potential rally.
Joel Kruger, market strategist at LMAX Group said that from a technical viewpoint, bitcoin needs to establish a clear break above $65,000 to suggest we are seeing the start of a bigger move that opens a push to fresh record highs. It has been trading in the range of $50,000 to $72,000 for the past several months, after reaching an all-time high of $73,798 in March
Crypto Market Rallies
The crypto market rallied 2% to just $2.2 trillion due to the much-awaited announcement. Ether bounced over 5% to $2,435 over the past 24 hours, while SOL surged over 6% to $138. The reduced interest rates and borrowings getting cheaper could prompt investors to buy high-risk assets like stocks and crypto.
As the broader crypto market rose with Bitcoin, it also triggered substantial liquidations. Derivatives crypto traders have seen $204.3 million worth of contracts forced to liquidate in the past 24 hours, of which $130.5 million were short positions, while $73.8 million were from longs, implying a market tilt as prices surged.
What Could Hold The Potential Rally?
Several factors could overturn the potential rally, even before it gets some momentum. The major one being the upcoming US elections. According to Bernstein analysts, a Trump win will drive Bitcoin to as high as $90,000 this year, and the cryptocurrency could fall to as low as $30,000 if Trump does not win.
Greg Magadini, director of Derivatives at Amberdata stated “While elections may create regulatory headwinds, monetary policy is providing tailwinds, making Bitcoin the most likely winner.”
$60,000: A Critical Background
The CEO of Pi42, Avinash Shekhar noted that a tug of war has been created between bulls and bears as the short-term holders are selling from August, signaling a potential price bottom, while long-term holders are maintaining support above $60,000.
He said that the $60,000 level is a critical battleground and that “a high above $62K could steer in bullish momentum, while a breakdown below $60K could extend selling pressure.”
