Just like any other commodity or stock, the Bitcoin (BTC-USD) rise paused. Prices failed to break out above $67,500 throughout last week. At around $62,500 last Friday, the biggest cryptocurrency ended the week down by 8%.
Fundamentally, the Federal Reserve’s indication to cut interest rates more than once in 2024 should have propped BTC prices higher. However, the U.S. dollar also defied the rate cut prognostication. The currency and Bitcoin market both indicate a skepticism that the U.S. Central Bank would change rates.
The strong U.S. dollar will continue so long as monthly CPI reports indicate high inflation. The Fed does not need to change rates. The economy is growing, wages are strong, and consumers are spending more. Lowering rates would further increase already favorable financial conditions. It would re-ignite growth and increase inflation.
Bitcoin Halving
Volatility for Bitcoin will rise while the US dollar is steady. The halving event in April created uncertainty for retail investors who bought Bitcoin ETFs. They do not have the experience of riding through the usual price swings.
Ultimately, the more Bitcoin corrects, the better it is for this cryptocurrency’s bullish run. $60,000 is a good support price over the next few weeks. If prices hold this level, it increases investor confidence in BTC’s long-term price appreciation.
