As bitcoin (BTC) rebounds to $63,000 (USD) following the US interest rate cut, a new scenario is emerging for the market.
According to the analysis firm Nodecharts, bitcoin is now “in its decisive phase.” This is stated in a report market, according to its historical behavior and the implication of the rate cut.
The Federal Reserve (Fed), the central bank of the United States, cut rates from 5.5% to 5.0%, giving rise to the first reduction in four years, as reported by CriptoNoticias. “The decision has generated an initially positive reaction, suggesting that part of this measure had already been previously discounted,” says Nodecharts.
Below you can see the price movement of bitcoin since yesterday, when the rate cut was announced.
The analyst firm explains that “a decrease in interest rates is often seen as a stimulus for the economy, as it can increase liquidity and lead investors to seek higher returns in risky assets, such as bitcoin.”
However, he warns that a significant rate cut can also be interpreted as a sign of concern for Potential recession risks on the horizon. Consequently, he argues that such a scenario could generate uncertainty and caution in the market.
“This balance between optimism and caution could be key to market performance in the coming days,” he highlights. Therefore, sees a possible increase in price volatility bitcoin as the week draws to a close.
Long-term bitcoin investors increase their purchases
In addition to the new monetary environment, Nodecharts on-chain data shows that, In recent weeks, there has been an increase in supply from long-term bitcoin investors“This behavior suggests that we are in a phase of market consolidation,” he says. In other words, “it could indicate that a new push is brewing,” he notes.
As the chart shows, the current accumulation by long-term investors is occurring after they had reduced their holdings in the first half of the year. Such behavior occurred during the rise of the Bitcoin price to all-time highs. That means they are viewing the correction since then as a buying opportunity, beyond the recent surge. The coin is currently trading 15% below its all-time high.
“This pattern may suggest that long-term users are repositioning themselves for the next market move,” the analyst firm said. That is, demonstrates the bullish sentiment of this group of investors.
The buying pressure from these players contributes to the price going up and usually precedes the entry of new investors who motivate the rally. Therefore, it suggests positive signs. Although, “it is important to keep an eye on different indicators in the coming months to confirm where the market is heading in this new phase,” concludes Nodecharts.
