After the recent economic news and new monetary policy outlook, what does it make sense to expect from the price of BTCUSD?
While the macroeconomic environment and the upcoming Fed decisions could provide the fuel needed for a new Bitcoin rally, the derivatives market does not seem to be in good shape. Given the recent news, what does it make sense to expect from the price movement of BTC/USD?
What’s happening on the macro level?
Bitcoin (BTC) is going through a period of heightened volatility, spurred by the recent data on the US consumer price index (CPI), which turned out to be lower than expected. The recent reading showed a 2.9% annual increase in the CPI, slightly below the forecast of 3.0%, while the core CPI remained stable at 3.2%. These data have had and will potentially have a significant impact on the financial markets, and BTC is no exception.
The question on everyone’s mind is: “How will this complex economic environment affect BTUSD ?” Perhaps the recent past can help provide an answer: in early August, unemployment in the United States exceeded expectations, fueling fears of a recession.
This led to a significant drop in US stocks in early August 2024. However, Bitcoin has shown good resilience, despite an initial crash, managing to recover ground even before the stock market began to recover. This behavior underlines how, in times of economic uncertainty, many investors consider Bitcoin as a store of value, a “digital gold” capable of protecting their assets against inflation and the devaluation of traditional currencies.
What to Expect With a Fed Rate Cut?
As the next Federal Reserve meeting approaches, scheduled for September 2024, attention is focused on possible interest rate decisions.
The likelihood of a rate cut has increased, given the combination of slowing economic growth and moderate inflation. A rate cut by the Fed could certainly impact Bitcoin, as well as other risky assets. One hypothesis is that lower rates could make fixed-income securities less attractive, driving investors toward alternative assets like cryptocurrencies.
A Look at the Derivatives Market
As $1.86 billion in Bitcoin and Ethereum options approaches expiration, the cryptocurrency market faces a crucial moment.
The put/call ratio, currently at 0.83, suggests a slightly bearish market sentiment. This indicator reflects the prevalence of put options (which give the right to sell) over calls (which give the right to buy), suggesting that investors may expect a correction in the near term.
Original article published on Money.it Italy 2024-08-17 11:37:18. Original title: Bitcoin: è tornato il momento di essere bullish?
