Bitcoin Falls Back After Attempt at $72K, but Fed, U.S. Data and Global Rate Cuts May Bring New All-Time Highs

Bitcoin surged to reach a peak of $71,700 earlier in the day due to the European Central Bank (ECB) announcing a rate cut. However, its price plummeted almost back to $70,000 before recovering slightly to $70,600 by press time, marking a 1% decrease over the previous 24 hours according to Bitcoin index data from CoinDesk.

As a dedicated market researcher, I’ve observed noteworthy trends in the cryptocurrency sector. Specifically, on prominent exchanges Binance and Coinbase, there have been concentrated spot sales. Simultaneously, short positions in perpetual futures contracts have been aggressively built up on derivatives platforms. These actions have collectively put downward pressure on crypto prices.

The data from CoinGlass indicates a substantial amount of borrowed funds has accumulated near the $70,000 and $72,000 price points, potentially subject to being repaid if Bitcoin breaks out of its current confined price range, leading to either gain or loss.

Although bitcoin has faced challenges in surpassing the $72,000 mark, experts predict a near-term surge to fresh peak prices due to improving macroeconomic circumstances that bolster the appeal of riskier assets.

In recent developments, central banks of advanced economies have been loosening their monetary policies. The European Central Bank (ECB) and Denmark’s central bank reduced their benchmark interest rates by 0.25 percentage points each, making today’s announcements the most recent instances. The Bank of Canada made a rate reduction earlier this week, while Switzerland’s central bank did so in March.

As a researcher, I am examining the ongoing debate regarding the U.S. Federal Reserve’s potential involvement in the global trend towards lower interest rates. Some Federal Reserve members have previously indicated that monetary easing might not be necessary until 2025. However, recent economic indicators reveal softening trends in inflation and growth. Tomorrow’s release of the May employment report could significantly influence this discussion, as a weak report may increase the likelihood of an imminent Fed rate cut.

As a research analyst specializing in forex and digital assets at Standard Charter, I have maintained my prediction of Bitcoin reaching a price of $150,000 by the end of this year. In my recent report published on Thursday, I also acknowledged the potential for a new all-time high in the coming days. If the upcoming payrolls data releases favorably, I anticipate that we may witness Bitcoin surpassing its previous record high over the weekend.