Crypto Market Rally Gains Momentum Amid Fed Cut Hopes
A minor crypto rally is underway, driven by investor expectations that the Federal Reserve will slash interest rates following weak jobs data and encouraging producer inflation reports. The crypto market capitalization has jumped to $3.95 trillion, with top gainers including Pump, Mantle, and Wormhole. Bitcoin (BTC) price has neared the resistance point at $114,000, sparking hopes of a sustained rally.
Key Drivers of the Crypto Rally
The ongoing crypto market rally is fueled by anticipation of a potential 0.50% interest rate cut by the Federal Reserve at its upcoming meeting. This expectation was triggered by the US publishing a weak jobs report, which showed that the economy created only 22,000 jobs in August, with the unemployment rate rising to 4.3%. Additionally, the US published an encouraging producer inflation report, with the headline and core PPI dropping unexpectedly in August, raising hopes of lower-than-expected CPI data.
Impact of Fed Cut on Crypto Market
A Federal Reserve cut would, in theory, be bullish for the crypto market, as it would boost liquidity, reduce bond yields, and lower the value of the U.S. dollar. Furthermore, the Securities and Exchange Commission’s potential approval of multiple altcoin ETFs, including Dogecoin, XRP, and Cardano, in October could also catalyze the crypto rally, leading to increased inflows from American investors.
Bearish Chart Patterns Threaten Crypto Rally
Despite the positive sentiment, Bitcoin’s price chart reveals bearish flag and wedge patterns, which could derail the crypto rally. The daily timeframe chart shows that the BTC price remains in a tight range, below the important resistance level at $115,000. Bitcoin has formed a rising wedge pattern, comprising two ascending and converging trendlines, which often leads to more downside.
Moreover, the weekly chart reveals a giant wedge pattern, formed since March last year, with the two lines nearing convergence. The Relative Strength Index and the MACD indicators have formed a bearish divergence pattern, which is often followed by a significant drop.
Conclusion
In conclusion, while the crypto market rally is gaining momentum, driven by hopes of a Fed cut and altcoin ETF approvals, the bearish chart patterns in Bitcoin’s price pose a significant threat to the rally’s sustainability. As the crypto market continues to evolve, it is essential to monitor these developments and adjust investment strategies accordingly. For more information, visit the original source link: https://crypto.news/crypto-rally-at-risk-as-bitcoin-price-flashes-risky-patterns-despite-fed-cut-hopes/
