Bitcoin
Hits $64,000 as US economic slowdown and rate cut hopes
Last updated: May 7, 2024 04:47 EDT | 5 minutes reading
Bitcoin was unable to continue its upward trend despite several supporting factors such as the falling US dollar and a dovish stance from the Federal Reserve.
BTC gave up some of its gains, falling to around $63,400 and hitting an intraday low of $62,961.
Although Bitcoin started the week on an upbeat note after falling to a low of $56,000 last week, it rose to $64,000 on Monday, buoyed by a cooler than expected US jobs report for April. The report suggested a slowdown in the economy, which could lead to reduced inflation and lower interest rates.
However, the rise in price was short-lived as BTC fell on Tuesday, possibly due to cautious sentiment ahead of the speech by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis. If his comments take on an aggressive tone, signaling a tighter approach to interest rates, it could strengthen the US dollar and negatively impact BTC.
Marathon Digital rises 18%: a beacon in Bitcoin mining amid market uncertainty
Marathon Digital Holdings, a prominent player in the Bitcoin mining sector, recently witnessed an 18% increase in its share price to $20.67, raising its market capitalization to almost US$800 million. This significant increase followed the announcement that Marathon would be included in the S&P SmallCap 600 index, underlining its growing prominence in the cryptocurrency mining industry.
Key points:
- Marathon Digital shares jump 18%, market value approaches US$800 million.
- Inclusion in the S&P SmallCap 600 highlights its growing importance in the industry.
- The company introduces an executive bonus plan to link leadership earnings to shareholder interests.
Despite the success of Marathon shares, Bitcoin itself has shown bearish trends, trading around $63,200, which reflects complex sentiment in the broader market. This contrast suggests that while individual companies may prosper, the global cryptocurrency market remains cautiously bullish or mixed.
SEC Halts on Ethereum ETFs as Investment Soars in Bitcoin Options
O The US Securities and Exchange Commission (SEC) postponed its decision to approve Ethereum exchange-traded funds (ETFs) once again, extending Galaxy Invesco’s application review period by another 60 days, until July 5. This delay continues a trend seen in previous postponements that have affected major financial players such as BlackRock and Fidelity, casting doubt on a near-term approval due to continued regulatory uncertainty. 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 Until July.
- Historic delays for major contenders like BlackRock and Fidelity increase regulatory unpredictability.
- In contrast, significant investments in Bitcoin ETFs, such as Hightower’s $68.35 million, highlight a divergent level of confidence between Bitcoin and Ethereum ETFs.
Although Ethereum faces regulatory hurdles, investment in Bitcoin ETFs is increasing, with companies like Hightower directing substantial capital into them, underscoring stronger market confidence in Bitcoin. This trend suggests that the market may be favoring Bitcoin over Ethereum amid these regulatory uncertainties, potentially positively influencing Bitcoin’s price in the short term.
Early Fed Rate Cuts Boost Bitcoin Demand Amid Weakening Dollar
The recent US labor market report has raised expectations that the Federal Reserve may cut interest rates later this year, leading to a weaker US dollar and increased attractiveness of Bitcoin. Richmond Fed President Thomas Barkin supports maintaining current rates to manage inflation, while New York Fed President John Williams suggests potential rate cuts as early as September or November.
Markets now forecast a total reduction of 46 basis points by 2024, signaling a shift towards a more accommodative monetary policy. This early easing consequently reinforced the appeal of Bitcoin as a hedge against currency devaluation, increasing demand and potentially its price.
- Key points:
- Anticipated Fed rate cuts weaken the dollar, increasing Bitcoin’s appeal.
- Potential rate cuts could total 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 in times of monetary easing, possibly leading to a sustained increase in Bitcoin’s market value.
On Tuesday, bitcoin price prediction seems optimistic. The cryptocurrency is currently trading at $63,535, marking a 0.59% increase. The asset now hovers above its midpoint at $63,002, suggesting a potential upward trajectory. Immediate resistance levels are identified at $65,512, followed by $67,331 and $69,441, which BTC needs to break to sustain upward momentum.
On the other hand, Bitcoin finds immediate support at $60,928, with additional support levels at $58,927 and $56,625 that could provide stabilization in the event of a decline. The 50-day exponential moving average, positioned at $62,631, closely aligns with the pivot point, reinforcing support for a potential upward move.
Key points:
- Bitcoin immediate resistance at $65,512; breaking this could confirm continued gains.
- Support was established around $60,928, crucial for near-term stability.
- Uptrend likely if BTC holds above $63,000; risks of sharp 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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