There will be no sharp adjustment following any potential interest rate cuts by the US central bank in September or November.
This is forecast from analyst ‘RamenPanda’ who noted that during financial crises, such as 2008, the Fed cut interest rates to preserve the economy but the market got worse and stocks fell after the rate cut.
Bitcoin booms after interest rate cuts
There is also another rare scenario in which the Fed cuts interest rates when the economy is doing quite well but interest rates are too high. They are currently at 5.25% to 5.5% over last year.
“This is an uncommon scenario and is the main reason the Fed will cut interest rates this year.”
This will lead to a boom similar to 1995 when the Fed cut interest rates, causing the dot com bubble a few years later. He said this led to a wave of investment in internet-related assets and the same could happen to crypto and AI-related assets this year.
“I think 2024 is going to be a lot more like 1995 than 2008. So hang in there, the AI bubble and the Bitcoin bubble will be released soon!”
It is reported that BTC market movements are correlated with US inflation data or Consumer Price Index (CPI) reports. These have a great influence on Fed policy and decisions to cut interest rates or keep them unchanged.
Earlier this week, analyst Willy Woo said Assets like gold, stocks and Bitcoin are good ways to beat CPI and currency devaluation.
Source: Willy Wo/ X
However, there could be more short-term losses before any significant gains. According to Markus Thielen of 10x Research, BTC could drop to $55,000 during this correction.
On June 28, Mr speak that “weekly and monthly reversal indicators signal a broader correction.” BTC is down 19% from its all-time high this week as it fell below $60,000 this week. However, it has yet to reach its current cycle average of around 22%, which would take it to $57,500.
Source: RektCapital/ X
If Thielen’s prediction comes true, the correction will be deeper by 25% or even 32% if it drops to $50,000.
Itadori
According to CryptoPotato
