Bitcoin bulls push toward $64k follows Fed rate cut

Key Takeaways

1. Fed rate cut boosts Bitcoin 6%, but BOJ decision could impact gains.
2. Bitcoin may benefit from additional Fed rate cuts expected by year-end.

Cryptocurrency traders have taken the Fed’s 50 bps rate cut as a signal to go risk-on as Bitcoin (BTC) bulls stampeded through the bear resistance lines at $62,000 and $63,000 and are now looking to flip $64,000 back into support.

“The crypto market rallied solidly by 3% to $2.18 trillion, gaining further momentum after the Fed's decisive rate cut,” noted Alex Kuptsikevich, senior market analyst at FxPro. “Increased risk appetite in the markets after the Fed's decision helped cryptocurrencies hit highs over the past three weeks. The crypto market has been moving within a downward corridor since mid-March, and only a surpassing of the recent $2.25 trillion peaks could change this trend.”

BTC price strength starts to match booming stocks

According to analyst Titan of Crypto, Bitcoin has developed a bull pennant pattern on its monthly chart, indicating a potential continuation of its upward trend. This pattern typically signals accumulation ahead of a major bitcoin price movement. At the same time, the S&P 500 reached a record 5,700 following the Federal Reserve's first rate cut in four years, suggesting that Bitcoin might also experience a significant rise.

This rally could indicate that Bitcoin is poised for a notable price increase in the near future. Enthusiasm over potential long-term easing of US financial policies persisted after the Federal Reserve implemented a significant 0.5% interest rate cut the previous day.

Both equities and gold saw gains, with the S&P 500 approaching new all-time highs, while BTC/USD started to make strides toward key resistance levels near its record peak from March.

Crypto market cap rose by 2%

Bitcoin is trading near $63,000, up 6% in the last 24 hours after the Federal Reserve’s decision to cut its benchmark interest rate by 50 basis points. This move has also lifted the overall crypto market, with the total crypto market cap rising 2% in response.

The rate cut is seen as beneficial for hard assets like Bitcoin, which tend to thrive in inflationary environments. However, the cut seems more reactive, aimed at tackling increasing economic concerns. Despite this, the market has responded positively, reflecting a sense of optimism among investors.

The Federal Reserve's decision to lower rates by half a percentage point was perceived as a proactive step to mitigate a potential slowdown in the labor market. While many investors expected some easing, predictions varied, with some anticipating a smaller 25-basis-point cut.

While September has historically been Bitcoin’s weakest month, it has risen 7% this time. Nonetheless, caution persists as the market shifts its attention to the Bank of Japan's upcoming policy meeting, which could greatly impact Bitcoin’s future price movements.

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