Original title: “Expectations of a 50 basis point rate cut ignited the market, and bulls fought back strongly”
Original source: Bitpush
Asset classes experienced widespread gains on Friday, with stocks, cryptocurrencies, and gold all rebounding in anticipation of the Federal Reserve’s upcoming policy shift just days away.
The market’s positive momentum largely stems from investor speculation that the Federal Reserve might unveil a 50 basis point rate cut post the Federal Open Market Committee meeting slated for next Wednesday. Bill Dudley, the former president of the New York Fed, has advocated for further rate reductions, believing there is a compelling argument to support them.
According to the CME FedWatch tool, the likelihood of a 50 basis point rate cut now stands at 49%, surging from 28% the previous day.
Bitcoin (BTC) saw a significant surge, climbing over $1,500 earlier in the day to reach $59,700, and breaching $69,000 after the U.S. stock market closed. At present, BTC is trading at $60,280, reflecting a 4.24% increase in the last 24 hours.
Altcoins also performed well throughout the week, with over 90% of the top 200 tokens registering gains. Notably, Nervous Network (CKB) led the charge with a 45.3% increase, while Pol (POL) and Popcat (POPCAT) recorded gains of 12.1% and 11.9% respectively. Conversely, Sun (SUN) marked a decline of 6.6%, followed by BinaryX (BNX) and Worldcoin (WLD) with drops of 5.4% and 5.1% respectively. The total cryptocurrency market cap currently stands at $2.1 trillion, with Bitcoin making up 56.4% of it.
In the U.S., the stock market continued its upward trajectory, as the S&P, Dow Jones, and Nasdaq indexes closed with increases of 0.54%, 0.72%, and 0.65% respectively. Notably, the S&P 500 and Nasdaq recorded their most substantial weekly gains since November of the previous year.
Expectations point to a rise in volatility levels moving forward. Bitcoin concluded the week on an upward trend, with analysts from Secure Digital Markets observing a pattern of heightened volatility within a descending channel. They foresee BTC potentially testing the $62,000 to $64,000 range in the upcoming week.
Regarding Ethereum, analysts have noted its underperformance compared to Bitcoin, with the ETH/BTC pair showing persistent bearish momentum. This suggests that Ethereum may struggle to keep pace with Bitcoin in the immediate future.
Although the anticipated rate cut bodes well for riskier assets, Lennix Lai, Chief Commercial Officer at OKX Global, cautions against expecting a seamless upward trajectory for asset prices. He advises traders to brace for continued volatility amid market uncertainty.
Institutional involvement in the cryptocurrency sector is forecasted to enhance stability and liquidity over the medium to long term, despite short-term market fluctuations. An Economist Impact Report commissioned by OKX revealed that 69% of institutional investors plan to boost their digital asset allocation in the next 2-3 years, indicating growing confidence in the crypto market amidst transient uncertainties.
Bitcoin’s recent price movements have been influenced by speculations surrounding rate cuts and a potential new rate cut cycle, alongside shifts in investor sentiment. Key support and resistance levels for BTC currently revolve around $50,000, pivotal points that may evolve as institutional engagement rises and mainstream adoption expands.
In the near term, BTC’s outlook appears cautious, yet optimism persists for the long haul, buoyed by factors such as heightened institutional uptake and investments, evolving regulatory clarity in major markets, and the continuous expansion of the crypto ecosystem.
Cryptocurrency analyst Jason Pizzino envisions the next phase of Bitcoin’s uptrend commencing once it surpasses $61,500 and solidifies this level as support. Despite acknowledging the likelihood of significant volatility, Pizzino maintains a bullish stance, emphasizing that even a potential 15% dip from current levels wouldn’t negate the positive trajectory of the market.
Pizzino’s analysis suggests that while volatility may continue to impact Bitcoin’s price, a retreat to around $40,000 would still keep the asset
