Bitcoin Price To ‘Chop’ Around This Range Until Q4, Analysts Say

by

As a seasoned crypto investor with a knack for reading between the lines, I find myself intrigued by the recent Bitcoin price rally and the potential impact of interest rate cuts on the market. Having weathered several bull and bear cycles, I’ve learned to navigate through the turbulent seas of cryptocurrency markets with a mix of patience, intuition, and a dash of luck.

The Bitcoin price rally triggered by Federal Reserve chairman Jerome Powell’s latest speech has been the major talking point in the crypto community this weekend. Analysts at trading firm QCP Capital are amongst the latest entities to weigh in on BTC’s return to within the $61,000 and $70,000 consolidation range.

How Interest Rate Cuts Could Affect The Bitcoin Market

As a researcher, I’ve been closely observing the recent developments in the cryptocurrency market. In response to the Federal Reserve’s hint at a potential cycle of lower interest rates, QCP Capital has expressed its perspective, noting that this announcement seems to have fueled Bitcoin’s price rally. Delving into on-chain data, I find that the primary driver behind this surge appears to be direct demand for spot Bitcoin, rather than speculation through futures or other derivative instruments.

As stated by QCP, the costs associated with maintaining long positions in the futures market, referred to as funding rates, stayed consistent throughout the rally. Notably, the trading firm predicts an increase in leveraged long positions if Bitcoin’s price continues to hold steady at approximately $62,000, especially as summer holidays come to a close.

To elaborate, the QCP report indicates a notable surge in bullish bets through options, predominantly focusing on the strike prices ranging from $62,500 to $63,000, prior to Powell’s address at Jackson Hole. The trading company also noted this trend.

On the back end, there’s a steady accumulation of long positions by bulls in December and March options (from approximately 80,000 to 85,000 strike levels).

Powell has made it clear that the Federal Reserve plans to lower interest rates in the coming month. According to QCP analysts, this move could be advantageous for Bitcoin’s price as a 25 basis point reduction might signal a cautious economic strategy by the Fed. If the cut is 50 basis points, it would suggest that the Fed is taking more aggressive action to prevent a potential economic downturn.

Over the last fortnight, there’s been a decrease in selling pressure and an influx of steady investment into Bitcoin spot exchange-traded funds (ETFs). However, QCP analysts are convinced that the price of Bitcoin will continue to stabilize between $61,000 and $70,000 until the end of 2024’s fourth quarter. The analysts assert that the upcoming US elections, combined with bullish market trends, might trigger record-breaking highs.

Bitcoin Price At A Glance

Currently, Bitcoin is hovering at approximately $64,250, showing a minimal rise of 0.5% over the last day. Data from leading crypto platform CoinGecko reveals that this premier cryptocurrency has surged over 8% in value within the last seven days.

Read More

2024-08-25 11:46