Markets See 0.5% Fed Rate Cut — 5 Things to Know in Bitcoin This Week

Bitcoin (BTC) begins a crucial macroeconomic week with a battle for $60,000 support.

After sliding into the weekly close, BTC's price action is operating in a key area of ​​interest to the bulls. Price indicators show the importance of a return to $60,000 – here a resistance / support scan will improve the position of both the daily and weekly charts. .This week, the US Federal Reserve will be in the driver's seat as it decides to cut interest rates for the first time in four years. Markets are confident the outcome will be just that – but last-minute uncertainty is pushing expectations that the Fed's action will be tougher than the zero minimum. Bitcoin analysts are biding their time before drawing conclusions on how BTC/USD will react. Bitcoin's dominance is at a three-and-a-half-year high, and ETH/BTC spells taxing times for altcoins.

The weekly close of BTC price brings the bulls to earth

Bitcoin came under pressure at the weekly close of September 15, with bulls charging both $60,000 and the recovery portion of the week.

Data from Cointelegraph Markets Pro and TradingView shows BTC/USD hovering around the $59,000 mark at the time of writing, still gaining 7.8% over the past week.

“It's going to be an interesting week for Bitcoin,” noted trader and analyst Mark Cullen wrote in a post on X.

Cullen focused on the main macroeconomic event of the week in the form of the US Federal Reserve's interest rate decision on September 18.

“Red starts the week, and on Wednesday the announcement of the key interest rate decision,” continued Jelle, another trader.

“Keep the current environment as it is – and I think it looks good for more exposure.”

However, in analyzing longer timeframes, Caleb Franzen, founder of Cubic Analytics, sees both the 365-day simple (SMA) and exponential moving averages (EMA) as support.

“Since the breakout in March and April 2023, BTC has been able to stay above the 1-year moving average and even turn into support during the recent support run in August and September,” he said in a blog post. Post on September 14.

“Could Bitcoin be simply testing its 1-year moving average before continuing higher, as it did in Q2 and Q3 2023? Until proven otherwise, yes!”

Bitcoin Indicators Reveal Resistance Barriers.

BTC price indicators are facing a critical resistance test as Bitcoin bulls turn up the heat at $60,000.

As reported by Cointelegraph, both the Ichimoku cloud and the Relative Strength Index (RSI) are showing key levels designed to flip towards the support.

But thanks to the lack of weekly convergence on the daily and weekly timescales, these continue to be obstacles to the upside.

On the weekly timeframes, BTC/USD remains stuck below the Tenkan-sen and Kijun-sen trend lines on the Ichimoku, while the RSI is similarly pinned below the key 50 mark.

The daily chart looks slightly better, with the price above 50 but still below the Ichimoku cloud.

On the 3-day timeframe, meanwhile, trading group StockMoney Lizards is seeing a significant RSI divergence, with prices now in favor of the bulls.

Many point to a reversal in the last two weeks of September. Uptober is coming,” he summed up.

Markets are betting on a Fed rate cut curveball

One event this week is set to shape macroeconomic volatility: the US Federal Reserve's interest rate cut.

The first since March 2020, the move, which will only be confirmed at the September 18 Federal Open Market Committee (FOMC) meeting, has long been priced in by markets.

The only question is how big it will be; The debate is currently centered on 0.25% vs. 0.5%, and the latest data from CME Group's FedWatch Tool currently sees the latter as more likely.

For Bitcoin, the picture is complicated – while risk assets should technically benefit from the extra liquidity flowing into markets due to policy easing, observers are already comparing busts rather than good times.

Financial analyst and investor Jacob King, CEO of crypto newsletter Wellwire, told X followers over the weekend, “While rate cuts may seem positive, they also reveal deeper concerns about borrowing, spending and investment.”

“Historically, sharp cuts have preceded crashes. why? This shows that the government is afraid and rushing to reverse the attack.

King especially in 2010. He cited the 2008 global financial crisis as the elephant in the room.

“The warning signs now point to 2008: rising unemployment, declining housing starts, falling home sales and slowing economic activity. Even the Fed funds rate chart looks very similar to 2007.

Others see Bitcoin's close correlation with broader global liquidity conditions, which are now increasing, for optimism.

Prominent trader Rickus, meanwhile, is among those preparing for BTC's price reaction. Part of X's analysis itself:

If you think this week's price cuts will somehow cause losses in BTC then something else may be coming, if there is no fear in the stock market in the 1st place then there will be no fear – if price cuts happen there will be 1st cuts in general. Be very smart and it will be recognized based on the decline of the background with the increase in price.

Rickus in 2010 In 2008, he argued, the macro conditions were “very different.”

BTC price behavior shows “unusual” patterns

With its most recent cycle low at the end of 2022, BTC/USD is recording history with “unprecedented” accuracy.

According to Checkmate, a well-known analyst who is the creator of Checkonchain, a source of onchain information.

By uploading the movement of the Bitcoin index to X, Checkmate has revealed an impressive pattern for BTC price action since the last bear market trough.

BTC/USD is trending toward a recovery from last cycle lows, providing key context for a year of sluggish performance complaints.

“Unknown. “Bitcoin is in the same position as the last two cycles since the low,” he summarized.

“I strongly prefer the cycle low comparison as it describes the psychological time it takes for investors to recover from a bear market. Revised measures are not relevant, but duration may be.”

Checkmate cited another iteration of Bitcoin's price progress – a measure of movement between halving events.

In this simulation, the onchain analysis shows that the stable Glassnode is something of an underperformer for the current cycle.

Bitcoin's dominance is up 58% while Ether is suffering.

Despite BTC's price struggles, times are tough for Ether (ETH) in the current Bitcoin bull market.

Related: Bitcoin rally to $60K boosts traders' interest in FET, SUI, AAVE and INJ

As ETH/BTC sets new multi-year lows, the data shows the biggest altcoin comparative weakness.

The pair set new lows of 0.0387 on September 16 and is weakening to levels not seen since April 2021.

Alex Thorne, head of research at Galaxy Research, responded that the pair has lost more than 50% since the Ethereum merger two years ago.

In turn, Bitcoin's share of the overall crypto market value continues to grow.

A new high of 58.07% on September 16 marked the most “Bitcoin-heavy” crypto market in three and a half years.

Crypto trader, analyst and entrepreneur Michael van de Pop said: “I expect bitcoin to dominate this area.

“It all depends on $ETH, but it looks like we're close given the current sentiment.”

However, van de Pop sees both altcoins as “bottoming” and bitcoin itself at a new all-time high next month.

“Gold is making new ATHs, and Bitcoin is waiting to follow that path,” reads part of another X post, referring to gold's recent performance.

New ATH in October.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.