Yesterday, the leading cryptocurrency jumped above $10,000 bringing in a fresh wave of green in the market.
But today, the cryptocurrency market is yet again in the red as BTC/USD takes a fall and altcoins follow the flagship cryptocurrency into the red.
However, Bitcoin bull and Fundstrat’s Tom Lee has positive expectation from this weekend.
The reason behind this is the upcoming weakness in the USD as a result of the Fed cutting interest rates.
He explains how the past few weekends led to a weakness in Bitcoin price but with the Fed expected to cut interest rates next week, we will get a weaker USD. And stock, cyclicals, and Bitcoin, “love” a weaker USD.
Lee expects Bitcoin to break the pattern currently ruled by bears this weekend and “actually” move upwards this weekend.
The First Rate Cut In Over A Decade
Nearly every measure warrants policy measures to consider a rate hike, not a cut but debate has been focused on the need to take preemptive action to avoid a potential slowdown.
An abrupt shift in the motion came when last December after raising rate overnight, Fed Chairman Jerome Powell signaled more hike.
However, the market tantrum in the aftermath had the Fed policy makers making a “pivot.”
Now, for the first time in over a decade, the Fed is expected to cut interest rates, a preemptive move as concern rise about the impact of a slower economy and trade wars.
Last week, stocks gained, with the Nasdaq and S&P 500 making new highs, as investors anticipate a Fed rate cut.
The July jobs report shows that the US economy is still strong and earning growth is slightly positive this quarter, so far.
However, it will be the Fed that will have the most impact on the market, with economists expecting anywhere from one to three rate cuts this year.
On the business side, gross private domestic investment dropped 5.5% in the second quarter, the worst decline since Q4 in 2015.
Moreover, GDP grew by 2.1%, a decline from 3.1% in Q1, reinforcing expectations that the Fed will cut rates, even though the report is better than expected.
Get ready for an uptrend…
This rate cut is the reason what has Lee expecting S&P to surpass Fundstrat’s 3,125 YE target before-end. It could very well happen next week.
A similar upside is expected by him in Bitcoin price which after the stellar performance of Q2, has been run down by bears.
All of Today's Bitcoin Price Analysis, Chart Forecasts and Industry News
- The first rate cut in over a Decade
- This rate cut by the Fed will result in weaker USD
- Bitcoin bull and Fundtsrta’s Tom Lee bullish about stocks and Bitcoin
- Bitcoin is currently in the red below $9,500 as we take a drop of more than $600 in a few minutes.