The looming decision by the US Federal Reserve to keep interest rates unchanged is having a significant impact on the cryptocurrency market, particularly on Bitcoin. With the recent release of the May Consumer Price Index (CPI) and Producer Price Index (PPI) data, analysts are closely monitoring the situation as the Fed gears up to make its final decision on interest rates. Currently, Bitcoin is trading at around $69,500, struggling to maintain its position above $71,000 from the previous week.
Anticipation is building for September, with market analysts, including those at CME Group, predicting that the Federal Reserve will maintain the current fed funds rate of 5.25-5.50%, which was set last July to combat inflation. Traders are adjusting their expectations following a stronger-than-expected employment report from the Bureau of Labor Statistics and are now considering the possibility of a rate cut in September 2024. This report has highlighted the potential upward pressure on inflation due to wage and employment growth, prompting investors to rethink their bets on an impending rate cut.
Cryptocurrency analyst Ali Martinez is optimistic about Bitcoin, forecasting a potential local peak of $89,200. Martinez points to the significant buying pressure observed in the Bitcoin Buyer Buy-Sell Ratio, which has surged to 730 at HTX Global, indicating a strong bullish sentiment. This ratio suggests that Bitcoin’s price could experience a notable upward movement in the near future.
Martinez also observes a notable increase in Bitcoin network activity, with the number of daily active Bitcoin addresses breaking a downtrend that began in early March. In the last 24 hours, 765,480 active addresses were recorded, signaling a positive indicator of the ongoing upward momentum in Bitcoin’s price.
Despite uncertainties surrounding the Federal Reserve’s decisions, the cryptocurrency market, especially Bitcoin, is showing signs of resilience and potential growth. The interest rate determinations expected this week will play a crucial role in shaping market sentiment and price trends. Bitcoin’s ability to hold its current levels and potentially reach new highs will largely hinge on the Fed’s stance on interest rates and broader economic indicators.
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