$BTC rose to $69,000 in 2021 amid low interest rates; central banks cutting rates could spark another bull run.
DrProfitCrypto predicts a 0.50% rate cut from the Federal Reserve, with Bitcoin primed for gains as liquidity continues to increase globally.
Liquidity cycles suggest another peak by 2026, aligning with potential Bitcoin price gains thanks to increased capital availability.
The ongoing shift in global monetary policies has rekindled interest in cryptocurrency markets. Now that central banks are cutting interest rates, market observers are turning their attention to how this will affect Bitcoin. In particular, a rate cut is anticipated as the Federal Reserve prepares for its next decision on September 18.
According to analyst DrProfitCrypto, this could potentially influence asset prices, with Bitcoin well positioned for bullish momentum given its past performance during periods of loose monetary policies.
Central banks cut rates again
Since 2021, central banks have been navigating fluctuating global liquidity levels. Interest rates stood at 0.25% in 2021 when Bitcoin rose to $69,000, reflecting the effect of increased liquidity on asset prices. After periods of monetary tightening, central banks have now cut rates again. This renewed policy approach could bring changes in liquidity, which would impact Bitcoin and the broader markets.
From 2000 to 2024, liquidity levels have shown a cyclical nature, recovering from significant declines such as those seen during the 2008 financial crisis. Liquidity levels recovered after 2010, but declined again between 2014 and 2020.
It is worth noting that the COVID-19 pandemic triggered a sharp resurgence in liquidity as central banks introduced measures to stabilise economies. This trend is expected to continue through 2026.
Analyst expects Fed to act aggressively
Ahead of the upcoming Federal Reserve meeting, analyst DrProfitCrypto has voiced his expectations for a 0.50% rate cut. He pointed to better-than-expected inflation data, such as the Consumer Price Index (CPI) and Producer Price Index (PPI), as key factors driving his prediction. A broader rate cut would signal the Fedâs commitment to stabilizing markets while also addressing inflation concerns.
While market expectations are split between a 0.25% and 0.50% cut, the analyst says the smaller reduction would not be enough to calm markets or sustain economic recovery. As liquidity increases, attention is shifting to Bitcoin, a digital asset that has historically responded to such economic changes.
Long-term liquidity trends highlight the market cycle
In addition to the upcoming rate cut, the overall liquidity cycle suggests a broader trend in global capital availability. Liquidity peaked in 2007 and 2014, and projections indicate another peak could be reached in 2026.
These cyclical trends have historically coincided with key global economic events, further influencing market behavior. As central banks adjust their policies, liquidity levels will continue to be a key factor in shaping financial markets and the outlook for assets like Bitcoin.
#TopCoinsSeptember #IntroToCopytrading #bitcoin #bullrun2024đđ
