Analysts have also turned bullish following the Fed’s rate cut and see the potential for Bitcoin to rally to $130,000.
Written by: BitpushNews
After the Federal Reserve cut interest rates by 50 basis points yesterday, the loose monetary policy boosted market sentiment, and U.S. stocks and crypto markets all rose.
Bitpush data shows that after the volatility caused by the initial rate cut subsided, Bitcoin bulls began to exert their strength, and BTC pushed up from the $60,000 support level to an intraday high of $63,903. As of press time, it fell back to $62,771, a 24-hour increase of 4.11%.
Altcoins saw impressive gains, with dozens of the top 200 tokens by market cap seeing double-digit gains.
Altlayer (ALT) led the gains, rising 42.1%, while Popcat (POPCAT) and cat in a dogs world (MEW) both rose 27.5%.
The current overall market value of cryptocurrencies is $2.19 trillion, with Bitcoin accounting for 57.1% of the market.
At the close of the U.S. stock market, the Dow Jones Industrial Average initially closed up 1.2%, the S&P 500 rose 1.7%, both hitting new highs; the Nasdaq rose 2.5%. Star technology stocks rose across the board, with Tesla (TSLA.O) up 7%, Nvidia (NVDA.O) up 4%, and Apple (AAPL.O) up 3.7%.
Bullish sentiment returns, BTC's next key position: $65,000
“In last week’s report, I argued that the Fed was about to enter a smooth, slow, orderly rate-cutting cycle because the market saw a very high probability of a 25 basis point cut, yet when the meeting finally took place, the Fed decided to cut by 50 basis points, which was unexpected by most people,” said market analyst Bloodgood in his weekly update. “This seemed like it should be better for the market — after all, we are lowering rates faster — but it’s not that simple.”
“Typically, the expected course of a well-performing economy is to cut rates by 25 basis points, leading to a soft landing, because cutting rates too quickly means the Fed is worried about a recession, which is not a good sign. Arguably, the last two times the Fed started a rate-cutting cycle with 50 basis points were in 2001 and 2007.”
“Nevertheless, Powell kept repeating the word ‘recalibration’ in an attempt to emphasize that this was a thoughtful 50 basis point adjustment rather than a panic move, and judging by market performance so far, there seems to be a mixed reaction, even though very solid economic data has significantly dampened recession fears,” he noted.
Bloodgood said that Bitcoin bulls were able to “break above a key weekly level without falling below the previous low of $49,000,” which could be “a sign that the trend is changing from bearish to bullish.”
The analyst believes: “Time will tell, but I am now expecting higher prices, which means breaking through $65,000. If it breaks through, more funds are expected to flow in, and $70,000 is possible in a few weeks. If $65,000 is rejected, we may test $60,000 again. If it fails, months of pain may follow.”
TradingView analyst Arman Shaban also highlighted $65,000 as a key level to watch, leaning toward the bullish outcome proposed by Bloodgood based on Bitcoin’s past performance.
Shaban wrote: “Analyzing the Bitcoin chart on the weekly timeframe, we can see that according to the previous analysis, Bitcoin has not stabilized below $57,870, and demand is strong again after a short-term correction wave. Last night, after the Federal Reserve announced a half-point rate cut, demand increased further and managed to rise to $62,500. Now, we have to see if the price can break through $65,000 by the end of this week’s candlestick chart. It is very likely that Bitcoin and other altcoins will soon start their major bullish wave, and Bitcoin’s medium-term potential target is $80,000.”
And Xanrox, a previously bearish TradingView analyst, also turned bullish after the Fed’s rate cut and believes that Bitcoin has the potential to rebound to $130,000.
Xanrox said: “Bitcoin has been trading sideways for more than 6 months, but this situation should end. On the chart, we can see a bullish flag, and the price action in recent days has greatly increased the probability of a bullish breakout. Although I have been bearish from May ($72,000) to now, the recent price action has changed my mind and has me moving to a fully bullish mode.”
He noted: “From an Elliott wave perspective, we are starting another strong impulse wave (5) and the sideways price action (wave (4)) appears to be a very complex WXYXZ triple triple corrective pattern. On the chart, you can see the price action throughout the bullish cycle starting at $15,476. From a time perspective, this makes sense as the time frame is almost identical to wave (2).”
To determine the price target, Xanrox utilized the Fibonacci extension tool to determine the 0.382, 0.618, 1.000, 1.382 or 1.618 extensions. “Wave (5) is always measured from the beginning of the uptrend to the end of wave (4), and I estimate the target to be around $130,000,” he said.
Despite the positive sentiment, analysts at Secure Digital Markets warned that the timing of the Fed’s rate cut could cause concern.
“If economic indicators deteriorate at the same time as a rate cut, this could be a sign of deeper economic problems,” they said. “Traders should keep a close eye on key indicators such as employment data and leading economic indicators. Historically, large rate cuts, such as those in 2001 and 2007, have led to major market declines – the S&P 500 fell more than 40% within 350 days during both rate cuts as unemployment rose sharply.”
“While this does not necessarily mean a repeat, it is critical to be aware of these patterns, especially as we go through a rate-cutting cycle,” they concluded. “Unlike in recent years when weak economic data was viewed as a positive catalyst for rate cuts, in this environment, deteriorating data could have the opposite effect, potentially dragging markets lower.”
