Bitrabo Editorial
Bitcoin and major altcoins are currently steady, but a recent sharp drop until August 5 caused widespread liquidations of leveraged positions, putting pressure on prices despite the current stability.
Rising Global Liquidity: A Boon for Bitcoin?
Despite the potential risks of Bitcoin, Solana, Ethereum, and others facing drops to multi-week support levels, an analyst believes the market is primed for a rebound. He highlighted the upcoming change in monetary policy by the US Federal Reserve, indicating a shift towards money printing.
The decision by the Federal Reserve to delay interest rate cuts, currently at multi-year highs, has caught many by surprise. It is anticipated that rates might reduce to 5% in the next Federal Open Market Committee (FOMC) meeting in September. The analyst also predicts a Treasury Buyback operation by the Federal Reserve, injecting around $30 billion into the economy monthly.
The reduction in interest rates and the buyback program are expected to significantly increase global liquidity. This influx of liquidity historically has led to surges in Bitcoin and crypto prices, as witnessed during the COVID-19 pandemic interventions from 2020 to 2021, where investors turned to Bitcoin for its scarcity and value-preserving capabilities.
Exercise Caution: BTC Holds Support at $50,000
Despite the positive outlook, it is crucial for traders to remain cautious due to Bitcoin’s inherent volatility, making it hard to predict price movements accurately.
The immediate support level to watch is at $50,000, a significant psychological level. If there is a recovery above $60,000, it might bolster bullish sentiments and attract more buyers to the market.
Institutional confidence in Bitcoin remains strong as Semler Scientific recently purchased $6 million worth of Bitcoin on August 5, following in the footsteps of MicroStrategy. The company now holds 929 BTC since its initial purchases in May 2024.