As global economic uncertainty continues to loom, Bitcoin (BTC) has faced increased volatility, struggling to maintain its position above critical resistance levels that it lost over the past month. The largest cryptocurrency in the market remains in a precarious situation, but emerging signs could indicate a potential recovery for the BTC price and the broader crypto ecosystem.
One promising development is the potential for further interest rate cuts by the US Federal Reserve (Fed) later this year. Market expert Walter Bloomberg highlights that Goldman Sachs Asset Management foresees the Fed implementing a series of three consecutive 25-basis point rate cuts in September, November, and December. Gurpreet Garewal, a macro strategist at Goldman Sachs, mentioned that a weak labor market, as may be indicated in the upcoming August jobs report, could prompt the Fed to take a more aggressive approach, possibly starting with a 50-basis point cut.
Money markets are currently pricing in a total of 100 basis points of rate cuts for the year, according to Refinitiv. This outlook is consistent with comments made by Fed Chair Jerome Powell last week, who suggested a dovish stance, indicating that the central bank is open to further rate reductions to address signs of cooling in the labor market. Such measures are generally viewed as positive for risk assets, including Bitcoin.
The anticipation of the rate cut had an immediate effect on Bitcoin’s price, which surged to a one-month high of $65,000 late last week. However, continued volatility caused the BTC price to retreat to $57,900 on Wednesday, though it has since recovered and is trading above $60,000.
Despite Bitcoin’s recent rebound above $60,200 on Friday, analysts are warning investors to remain vigilant for potential further price declines, as the largest cryptocurrency still lacks strong catalysts. Crypto analyst Ali Martinez identified a sell signal on the Bitcoin hourly chart using the TD Sequential indicator, suggesting that another price correction could be imminent.
With this in mind, the $58,000 level has already proven to be a significant support level for Bitcoin this week. If breached, the next major support level in the near term would be $57,200, based on the daily BTC/USDT chart. However, should this scenario unfold, the token’s overall macro range would remain intact, as this has been part of Bitcoin’s price consolidation between $57,000 and $70,000 for the past six months following the correction from all-time highs of $73,700.
The daily chart illustrates Bitcoin’s price consolidation between $57,000 and $70,000 over the past six months.
