The price of Bitcoin has been locked in a corrective wave since the middle of March, after reaching its all-time high vertically in the wake of the validation of spot Bitcoin ETFs by the Securities and Exchange Commission (SEC). While the halving is imminent, Bitcoin is still looking for its low point.
The FED’s pivot postponed to 2025?
Since October 2023, the major stock market trends have been shaped by a single theme: the highly anticipated and thunderous pivot of the Central Banks, especially that of the Federal Reserve (FED) and the European Central Bank (ECB).
While the ECB's pivot seems certain for this year with 4 rate cuts by the end of the year, that of the FED could not take place in 2024, enough to pose a risk of crash at the same time on the United States stock market and on the bond market (which has already experienced a major crash in 2022 and 2023).
So what's going on?
Let's take things in a logical order: what are the reasons that could lead the FED to initiate a downward trend in the federal funds rate from the 2023 peak at 5.5%?
The first reason is the defeat of inflation, that is, a belief that underlying inflation will continue to fall towards 2% even if the pivot takes place. Powell's FED does not have this conviction at the current stage, with an unexpected update of disinflation over the months of February and March for the PPI, the CPI and the PCE.
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The second reason could be an increase in the risk of recession in the United States economy, but the recent update of hard data and soft data seems to rule out this hypothesis, it is still the soft landing which is the main scenario on the table. The US services PMI is still expanding and the IMF has revised upwards its growth forecast for 2024.
The third reason could be an increase in the US unemployment rate above the threshold of 4.1% of the active population. For the moment, it is stable at 3.8%.
The FED will pivot when inflation starts to avoid disrupting US economic growth which ensures profit growth. Next up, the PCE inflation update on Friday, April 26.
CME FED Watch tool which describes expectations of changes in the federal funds rate in the United States
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Bitcoin looking for the bottom of its correction wave
In terms of technical analysis, the price of Bitcoin could be close to having completed its correction wave which was initiated in the middle of last March. The market currently offers a regular flat structure using the terminology of Elliott waves.
The bottom of BTC could be in the area of 57,000/60,000 dollars, but only the overcoming of a resistance will validate the low point of BTC, and it is every morning and on video that I give you my opinion trading on BTC and altcoins.
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Chart which reveals the Japanese intraday candles (H4) of the BTC/USD price
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Vincent Ganne is a market strategist, technical analyst, stock market trainer and speaker on BFM Business. With extensive experience in the field of analysis, he offers a global approach to financial markets. Both from a macroeconomic point of view and from a microeconomic point of view. Vincent Ganne also uses many aspects of graphical analysis with the aim of forecasting trends in financial assets over the medium and long term.
Vincent Ganne
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