Blockchain
It reaches $64,000 on US economic slowdown and rate cut hopes
Last Updated: May 7, 2024 4:47am EDT | 5 minute read
Bitcoin failed to continue its upward trend despite multiple supporting factors such as a bearish US dollar and a dovish stance from the Federal Reserve. It lost some of its gains, falling to around 63,400 and hitting an intraday low of 62,961.
While Bitcoin started the week on a bullish note, after falling to a low of $56,000 last week, it rose to $64,000 on Monday, spurred by a colder-than-expected April U.S. jobs report. The report suggests a slowdown in the economy, which could lead to lower inflation and lower interest rates.
However, the price rise was short-lived as BTC fell slightly on Tuesday, likely due to cautious sentiment ahead of a speech by Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis. If his comments take an aggressive tone, signaling a more stringent approach to interest rates, this could strengthen the US dollar and negatively impact BTC.
Marathon Digital Soars 18%: A Lighthouse in Bitcoin Mining Amid Market Uncertainty
Marathon Digital Holdings, a prominent player in the Bitcoin mining industry, recently witnessed an 18% rise in its stock price to $20.67, boosting its market capitalization to nearly $800 million. This significant increase followed the announcement that Marathon would be included in the S&P SmallCap 600 Index, underscoring its growing importance in the cryptocurrency mining industry.
Key points:
- Marathon Digital shares rise by 18%, the market capitalization is approaching $800 million.
- Inclusion in the S&P SmallCap 600 highlights its growing importance in the sector.
- The company introduces an executive bonus plan to tie leadership earnings to shareholder interests.
Despite Marathon’s stock success, Bitcoin itself has shown bearish trends, trading around $63,200, reflecting complex sentiment in the broader market. This contrast suggests that while individual companies may thrive, the overall cryptocurrency market remains cautiously optimistic or mixed.
SEC Stalls Ethereum ETFs as Investment Surges in Bitcoin Options
THE The US Securities and Exchange Commission (SEC) postponed its decision to reapprove Ethereum Exchange Traded Funds (ETFs), extending the review period for Galaxy Invesco’s application by an additional 60 days to July 5. This delay continues a trend seen in previous delays affecting major financial players such as BlackRock and Fidelity, raising doubts about a near-term approval due to ongoing regulatory uncertainties. Analysts are increasingly skeptical about the likelihood of Ethereum ETF approval in the current climate.
- Key points:
- SEC Postpones Ethereum ETF Decision, Extending Galaxy Invesco Review into July.
- Historic delays for major applicants such as BlackRock and Fidelity increase regulatory unpredictability.
- In contrast, significant investments in Bitcoin ETFs, such as Hightower’s $68.35 million, highlight a diverging level of trust between Bitcoin and Ethereum ETFs.
As Ethereum faces regulatory hurdles, investment in Bitcoin ETFs is on the rise, with firms like Hightower directing large amounts of capital towards them, underscoring greater market confidence in Bitcoin. This trend suggests that the market may favor Bitcoin over Ethereum amid these regulatory uncertainties, potentially positively impacting the price of Bitcoin in the near term.
Planned Fed rate cuts drive demand for Bitcoin amid a weakening dollar
The recent U.S. labor market report has heightened expectations that the Federal Reserve may cut interest rates later this year, leading to a weaker U.S. dollar and greater attractiveness for Bitcoin. Richmond Fed President Thomas Barkin favors holding current rates to manage inflation, while New York Fed President John Williams suggests potential rate cuts as early as September or November.
Markets now expect a total reduction of 46 basis points by 2024, signaling a shift towards more accommodative monetary policy. This early easing has consequently strengthened Bitcoin’s attractiveness as a hedge against currency devaluation, driving up demand and potentially its price.
- Key points:
- Anticipation of Fed rate cuts weakens the dollar, increasing the attractiveness of Bitcoin.
- Potential rate cuts could amount to 46 basis points by 2024.
- Increased demand for Bitcoin could lead to higher prices.
This growing interest in Bitcoin, spurred by the prospect of lower interest rates, highlights its role as an alternative investment during periods of monetary easing, likely leading to a sustained increase in Bitcoin’s market value.
On Tuesday, bitcoin price prediction looks bullish. The cryptocurrency is currently trading at $63,535, marking an increase of 0.59%. The asset is now hovering above its pivot point at $63,002, suggesting a potential bullish trajectory. Immediate resistance levels are identified at $65,512, followed by $67,331 and $69,441, which BTC needs to overcome to sustain the bullish momentum.
In contrast, Bitcoin finds immediate support at $60,928, with further support levels at $58,927 and $56,625 potentially providing stabilization in the event of a decline. The 50-day EMA, positioned at $62,631, aligns closely with the pivot point, strengthening support for a potential move higher.
Key points:
- Bitcoin’s immediate resistance at $65,512; breaking it could confirm continued gains.
- Support stood around $60,928, crucial for short-term stability.
- Bullish trend likely if BTC holds above $63,000; risks of heavy selling if it falls below.
In conclusion, Bitcoin shows signs of a positive trend as long as it remains above $63,000. However, a drop below this critical level could trigger significant selling pressure.
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Disclaimer: Cryptocurrencies are a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.
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