Bitcoin is showing signs of stabilizing as key macroeconomic pressures begin to ease, with experts suggesting the top-tier cryptocurrency may have hit bottom.
Bitcoin rose nearly 2% in 24 hours to hit a high of $109,405, fueling a small rally across the broader altcoin market, according to CoinGecko data.
“I think Bitcoin has bottomed out here,” said Peter Chan, head of research at Presto Research. decryption. “We expect the next move to be more likely to be up than down.”
The possible bullish reversal follows the Fed's dovish turn last week, when Chairman Jerome Powell suggested quantitative tightening may be nearing an end and rate cuts are on the table.
With the end of the QT looming and liquidity withdrawals slowing, risky assets could benefit from less headwinds in the financial environment, or so it is believed.
Meanwhile, the US-China trade war, which previously triggered the US-China trade war, has softened. historic liquidation cascade Treasury Secretary Scott Bessent and Vice Premier He Lifeng were scheduled to meet earlier this month and again this week. meet in malaysia To further ease the tension.
Derby research director Shaun Dawson echoed Chong's sentiments, but warned that risks remained.
“This is probably a local bottom. Lower interest rates will push investors up the risk curve into assets such as cryptocurrencies,” Dawson said. decryption. “However, the risk of an escalation in the US-China trade war could cause further declines.”
The immediate future of Bitcoin and the broader crypto market hinges on the inflation report being released on Friday. decryption It is said that the outcome of US-China trade negotiations will have a major impact on market sentiment.
“Bitcoin is very sensitive to these negotiations,” Dawson said, noting that the biggest price movements this year occurred after the tariffs were announced. “If these concerns are resolved in a positive manner, we are likely to see a significant uptick.”
Looking ahead, Dawson said the Fed's plan to end quantitative tightening, which includes shrinking central bank balance sheets, “will be bullish for Bitcoin,” noting that the return to liquidity will create a more favorable environment for speculative assets.
Bond traders expect a quarter-point rate cut at the Fed's next meeting, scheduled for Oct. 29.
Dawson added that while a higher-than-expected rate cut would be positive for Bitcoin's price action, “this will be sustained and emerge for the long term, probably by the first quarter of next year.”
