Due to worrying US GDP data increasing the possibility of Federal Reserve rate cuts, Bitcoin is preparing to break through consolidation.
As the market expects the Federal Reserve may cut rates earlier than anticipated, Bitcoin once again broke through $95,000 on May 1st, reaching a high of $97,424, currently reporting at $96,500.
VX：TZ7971
Federal Reserve Rate Cuts Will Drive Bitcoin Price Increase
After US GDP data reflected economic contraction, Bitcoin's price dropped below $93,000, then slightly rose in the following hours.
Economic contraction might prompt the Federal Reserve to cut rates quickly to stimulate economic activity. This would lower yields on traditional assets like bonds, encouraging investors to turn to Bitcoin and risk assets.
The possibility of the Federal Reserve cutting rates at the Federal Open Market Committee meeting on June 18th increased in the past week, rising from 57% on April 30th to 60% on May 1st.
Rate cut expectations have historically been a positive catalyst for risk assets and Bitcoin. For example, Bitcoin rose over 20% before the Federal Reserve's last rate cut on December 18th, 2024. Despite economic contraction and low consumer confidence, traders expect the Federal Reserve to adopt loose and rate-cutting measures in the future.
The focus now shifts to the May 2nd employment report, which will reveal how many jobs were added in April and how this might affect the cryptocurrency market and Bitcoin price.
What's the Next Move for Bitcoin Price?
Currently, $9,000 is a key level traders are watching, with the market believing that continuously breaking through the resistance above this area will open the door to rapid appreciation.
The price has recently surged above two key technical levels and is now trying to consolidate in this area.
The 111-day Simple Moving Average (SMA) is $91,300, and the Short-Term Holder Cost Basis (STH) is $93,200. Bitcoin has recovered these levels in its recent rise, highlighting the strength behind this move.
These levels must be broken and maintained to further drive price increases, as falling below could push the price back into a bearish zone and leave many investors facing significant unrealized losses.
BTC breaks free from consolidation, with the next logical move being towards the psychological level of $100,000.
If it breaks below the April 30th low of $93,000, BTC/USD might further drop to the $84,000 and $88,000 range. If the price continues to rise unimpeded, BTC will move towards the $100,000 area.
