Bitcoin gearing up for really as FED hints on rate cut

The Bitcoin (BTC) prices are back in green as the Federal Reserve (FED) suggests it is likely to cut interest rates. Lowering the rates will decrease lending costs and improve liquidity towards the crypto and stock market. In anticipation of the rate cut the BTC price has increased in value back from its correction it suffered in the past days all the while the Bitcoin halving event is coming closer. 

In the first days of April the bitcoin price sharply fell from over $71200 to a local bottom of almost $65000. Since then the price of the biggest cryptocurrency has climbed back up to a current price of $67000, resulting in a 3% increase in the past 3 days. The bounce in the BTC price is suggesting that crypto investors are expecting a possible rate cut in the coming months. 

FED rate cuts expected in early summer

Earlier in the month FED chair Jeromy Powell warned of the possibility of delaying rate cuts as the inflation numbers in the United States were worse than anticipated, resulting in a significant crash in the broader crypto market. Howerever, in a recent speech at Stanford Business school in California Powell has highlighted a potential rate cut in early summer of this year giving the economy more breathing room. 

Market analyst and founder of Navellier & Associates, Louis Navellier, wrote about the correlation between the bitcoin and crypto prices and the FED interest rate policy. The market seems to be anticipation a decision by the authority before making its move, as Navellier wrote: 

“Bitcoin continues to struggle to hold a level above its old high, and the whole crypto sector rolled over when interest rates jumped,”

BTC gearing up for all time high

The news of possible rate cuts align with the upcoming BTC halving event, which is set to occur in two weeks. During this event the bitcoin mining reward will be cut in half resulting in miners earning 3.125 BTC per block instead of the currency 6.25 BTC. This means the buying pressure of miners will further decrease over time and bitcoin will become a more scarce asset. Both the easing of the monetary policy by the FED and the halving event can further propel the BTC price in the near future gearing it up for a rally to challenge its current all time high of over $73400.