Bitcoin Rally is once again capturing headlines as new U.S. inflation data fuels expectations for a Federal Reserve rate cut. This development has the potential to boost various risk assets, including Bitcoin, toward an astonishing new all-time high of $140,000.
Recent reports show that the U.S. Consumer Price Index (CPI) has climbed to 2.9% in August, marking its highest point since January. Furthermore, the Core CPI, excluding food and energy, rose to 3.1%, the highest since February. These figures have ignited discussions about a possible rate cut by the Federal Reserve, potentially by 25 basis points in the upcoming meetings.
Fed Rate Cut: A Catalyst for Bitcoin Rally?
The prospect of a Fed rate cut is seen as a significant catalyst for a Bitcoin rally. As the market anticipates three 25-bps interest rate reductions by year-end, the chances for a 25-bps cut have increased to 84%. A rate cut could mean cheaper borrowing costs, leading to more liquidity and an increased appetite for risk assets like Bitcoin.
Historically, Bitcoin has thrived in environments of monetary easing. The most notable instance was in March 2020 when COVID-19 struck, prompting the Fed to slash rates drastically. Bitcoin’s value surged from approximately $5,000 in March 2020 to an impressive $69,000 by November 2021.
Market Predictions: Bitcoin’s Path to $140K
Analysts are closely watching Bitcoin’s price movements following the CPI data. With a recent spike to $114,500, Bitcoin has shown signs of volatility. Despite this, a significant bullish crossover in the MACD indicators suggests a potential upward trend, reminiscent of previous rallies.
Some experts predict that Bitcoin might dip to $105,000 before embarking on a journey beyond the $124,000 mark. A MACD golden cross, a rare technical occurrence, has historically preceded major price surges, reinforcing predictions of a Bitcoin rally to $140,000.
Technical Analysis: Bitcoin’s Bull Run Indicators
From a technical standpoint, Bitcoin is breaking out of a descending channel, with emerging ascending triangle patterns hinting at a bullish trajectory. The breakout above channel resistance supports a price target of $120,000.
Looking at the long-term chart, Bitcoin seems to be entering its fifth major bull cycle since 2011, aligning with historical patterns of growth. Such indicators suggest that Bitcoin is transitioning into a parabolic bull phase, with significant upside potential in the coming months.
Traders should keep an eye on the $109,116 support zone, which could act as a critical level in sustaining the bullish outlook.
