- US announces first interest rate drop since 2020, shifting from 5.5% to 5.0%. We break down key insights.
- Bitcoin broke above $60,000 USD this morning.
- Altcoins analysis: OM and AAVE.
We’re finally here! Interest rates have dropped in the US, and the market has responded with a rally this morning. This follows a long and divisive debate on social media about the direction of US interest rates.
For those who have been following my articles on CNA, not a huge surprise result. I have spoken about this from a data perspective most of this year. Still good to see it! As inflation has been trending downward and growth slowing in the US, this is a key piece of the puzzle in my opinion of Bitcoin hitting new all time highs. More details below.
Bitcoin is currently trading at $62,000 USD, surpassing the monthly open of $58,960 USD for September. The crypto space’s total market cap has also regained a valuation of $2 trillion USD this week. Before the March correction, this figure stood at $2.7 trillion USD.
First Rate Drop in The US Since 2020
The US interest rate now stands at 5.0%, a sharper decrease than the 5.25% forecasted by policymakers at 4:00AM AEST.
Below are takeaways from the statement released early this morning and the latest US economic projections.
- The Committee has gained greater confidence that inflation is moving sustainably toward 2%.
- The committee’s expectations show further rate cuts in 2024, with most votes between 4.25% and 4.75%.
- Unemployment is projected to rise in 2024 to 4.2%-4.5%.
- GDP expectations have shifted from 2.2%-2.3% to 2.0%-2.1% for 2024.
Fear and greed currently reads 37.
Related: Fed Announces First US Rate Cuts in Four Years, How Did Crypto React?
Bitcoin – BTC
Prices are currently trading near previous highs heading into the weekend. After breaking and reclaiming this currently smaller range on both sides, below are two price action-based scenarios that may play out from here.
Bullish Scenario
If the push higher continues to gain momentum, we could see a move into previous July highs of just under $70,000 USD.
Bearish Scenario
Should the bulls ease off the gas in the coming days, the current range may offer an area for another move to the downside.
Related: RBA Shifts Focus, Drops Retail CBDC, Prioritises Wholesale in New Roadmap
Mantra – OM
Mantra is another asset that is currently trending above the golden Fibonacci ratio of 0.618, which could suggest a larger move is imminent.
Source: TradingView
Bullish Scenario
Having now pushed off the 0.618 Fibonacci ratio, the ‘golden’ ratio, we could now see a move from the bulls to prior highs of $1.41, and then pushing to newer highs of $1.63 and $1.90.
Bearish Scenario
Failure to find interest from bulls at these present levels could result in prices falling back to below $1.02.
Aave – AAVE
Following on from last week, I thought it would be good to follow up on an asset for once. I identified that AAVE could potentially see a pull back before a shift higher, we might be seeing that play out now.
Source: TradingView
Bullish Scenario
Finding support at the 0.786 Fibonacci level, and pushing higher towards $153.72, $176.34 and $205.12.
Bearish Scenario
Failure to find any interest here from buyers could lead to prices under $135.92.
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