bitcoin Price Struggles with Resistance Amid Economic Data
The bitcoin (BTC) price faced significant resistance around $61,300, represented by its 50-day moving average, on Thursday. Despite positive economic data suggesting that the US economy may avoid a recession, the price retreated to around $60,000.
New insights in the service sector highlighted promising signs of growth. However, all eyes are now on Fed Chair Jerome Powell's upcoming speech at Jackson Hole, where he is expected to hint at a series of interest rate cuts starting next month.
Impact of Powell's Speech on bitcoin Price
Market expectations are centered on Powell signaling a 25 basis point rate cut in September. While there is a modest probability of a 50 basis point cut, any deviation from the anticipated rate adjustment could rattle traders.
The immediate reaction in the bitcoin market is likely to reflect traders' interpretations of Powell's rate cut preferences. A slower pace of easing might lead to minor downside movements in the bitcoin price.
However, the focus should shift from the September cut to the Fed's long-term monetary policy outlook. Traders are monitoring the trajectory of future rate cuts, with expectations of approximately 125 basis points in easing by 2025.
Powell's remarks will set the tone for future rate adjustments, potentially impacting market sentiment and overall asset valuations. The crypto market, including bitcoin, is poised to benefit from lower interest rates, fostering increased liquidity and investment in riskier assets.
Factors Driving bitcoin Toward $100,000
Anticipated ease in liquidity conditions paves the way for bitcoin to reach $100,000 in the foreseeable future. This upward trajectory is complemented by a favorable political environment in the US, gradual institutional adoption through ETFs, and the delayed but potent impact of the recent halving event.
Short-term traders should watch for potential breakouts from current market structures that could lead to a retest of July's peak levels around $70,000. However, significant price surges to new all-time highs might be deferred until after the summer and post the US election.
In summary, while short-term fluctuations in the bitcoin price are influenced by shifting market sentiments and economic data, the long-term bullish case for bitcoin remains intact, supported by fundamental factors and evolving macroeconomic trends.
