Bitcoin (BTC) - Steady Rise Sparks Cautious OptimismEarlier last week, disappointment around Trump's presidential debate performance led to MARKETSCOM:BITCOIN "selling the news,” dropping below $56K. This drop was anticipated on a technical basis, and the reaction was muted after higher-than-expected inflation figures on Wednesday were absorbed.
Markets were initially anticipating a 25 basis point rate cut from the Fed. However, recent data has shifted expectations towards a potential 50 basis point reduction. This change has added to Bitcoin's short-term uncertainty, as traders may be gearing up for a more significant cut. A rate cut @ 25 basis points could lead to a short-term sell-off as traders re-adjust.
Nonetheless, Bitcoin's consistent upward movement this week has led to a shift in sentiment to "cautiously optimistic." Prices are significantly improved compared to the levels observed when Bitcoin was hovering around the 53K mark.
With that in mind, this should be the level to bid if one considers the BMS and the current importance of staying above the mid-$56K range.
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The key level for the entire market is critical. I would welcome a retest of the $42-44K range if September sees a downturn. For now, this is the level to target if you're bullish. A break below this range would shift my outlook to bearish, with the target previously mentioned in mind.
In the event of a breakdown, we need to see a V-shaped reversal to counteract the bearish trend. Without a strong reversal, expect bearish market conditions for the next six months.
