Since the U.S. Federal Reserve cut interest rates by 50 basis points on Thursday 19th, the price of Bitcoin has risen by more than 6% and reached a high of $63,800 in early trading on Friday in the Eastern United States. This rebound came at the beginning of this week. This comes after the price briefly touched a local bottom around $57,500.
Derivatives trader Gordon Grant told the media that in addition to the Fed’s policy changes, the weakening of the yen also provided support for Bitcoin. USD/JPY has been strengthening since Monday, providing further upside for Bitcoin.
Grant mentioned that "Bitcoin can benefit from this specific currency dynamic." A stronger dollar against the yen has historically been beneficial to riskier assets, as the yen is often used as a funding currency for "risk-on" transactions, and investors By borrowing low-interest currencies such as the yen to seek higher returns, "the current weakness of the yen against the dollar plays a crucial role in the market."
The Bank of Japan appeared hesitant on its commitment to raise interest rates, choosing to keep its policy rate unchanged at 0.25%, further reinforcing the macroeconomic environment of a stronger dollar and weaker yen. In July, the Bank of Japan said it would continue to raise interest rates if inflation follows its expected path. However, the central bank decided to keep interest rates steady even as the impact of government measures to curb CPI inflation "dissipates" and CPI inflation is expected to rise in 2025.
USD/JPY was up 0.74% at 143.65, near an overnight high of 143.95.
Analysts have mixed views on Bitcoin’s near- and long-term price outlook following the Federal Reserve’s 50 basis point interest rate cut. The rate cut signals a possible easing of economic conditions and could have a significant impact on Bitcoin in the coming weeks and months, but explanations for its impact vary.
Blockchain reported earlier that Geoff Kendrick, head of cryptocurrency strategy and emerging markets foreign exchange at Standard Chartered Bank, once again made predictions about the trend of Bitcoin. He said that after the Federal Reserve decided to cut interest rates by 50 basis points, the broader crypto asset market is expected to continue. boost. Kendrick further pointed out that regardless of the outcome of the upcoming U.S. presidential election in November, macroeconomic factors will drive crypto asset prices higher.
Cryptocurrency trader and analyst Michaël van de Poppe posted on social platforms that "BTC/USD is performing well." "I think we will consolidate before continuing to rise, but essentially, the market is rising since Bauer spoke. Otherwise, there is enough room to buy on the dip.”
However, BRN analyst Valentin Fournier gave a more cautious long-term outlook, "Technical indicators indicate that Bitcoin's upward momentum may be nearing a peak. The price is approaching the upper Bollinger Band, and the stochastic RSI indicates a potential trend reversal. Currently , we recommend keeping exposure low and only considering reinvesting at prices around $56,000 or lower.”
〈Analyst: The strength of the U.S. dollar against the yen creates favorable risk market conditions for Bitcoin〉 This article was first published on "Block Guest".
