Bitcoin Soars to $60k Over Weekend, Drops Today; Traders Brace for Rate Cut

Bitcoin (BTC) prices experienced a rollercoaster ride over the weekend, rising from $58,000 on Friday to a high of $60,694 on Saturday, but reversed course after the second assassination attempt on presidential candidate Donald Trump, testing support levels at $58,000 again during early Monday trading.

Alex Kupcsikevich, a senior market analyst at FxPro, stated: "The cryptocurrency market started the weekend on a good note, but failed to sustain the upward momentum in recent days, falling by 2.8% over the last 24 hours, with a market cap reaching $2.04 trillion."

"The pullback from the $2.12 trillion region looks like a new lower local high, continuing the series from March, with the potential to fall back below $2 trillion and consolidate there," he added.

"On Saturday, Bitcoin climbed above $60,500 but failed to consolidate at this level, encountering resistance from the 50-day moving average."

"Bitcoin traded below $58,700 at the start of active trading in Europe.

The momentum of the short-term rebound has ended, and it will move again towards the lower limit of the trading range at $53,000, which is not impossible.

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However, we expect the market to make no significant moves before the Federal Reserve's interest rate decision on Wednesday evening."

Data provided by TradingView shows that bears continue to drive BTC price action, now hoping to break through the $58,000 support level, with a showdown at $57,000 for the bulls.

Amid slowing inflation and interest rate cuts, analysts are divided on whether Bitcoin will continue to rise or return to lower support levels.

Analysts at Bitfinex pointed out: "Bitcoin has made a strong recovery, surging by more than 15% from the recent low of $52,756, thanks to a significant increase in Bitcoin ETF inflows."

"Over the past week, BTC ETF recorded a net inflow of $403.9 million, reversing a long-term outflow and indicating that investors are regaining confidence in the asset."

They added: "Although Bitcoin currently faces local resistance, both on-chain indicators and spot market activity suggest that the current momentum may favor the bulls."

"This rebound has been driven mainly by aggressive buying in the spot market.

In contrast, the trend in futures and perpetual markets is less pronounced, indicating that the current price increase is based on real capital inflows rather than speculative leverage, providing a more sustainable basis for the rebound."

Bitfinex analysts warned: "However, BTC now faces a key resistance level between $60,500 and $61,000, which has been key since early March."

"Although ETF inflows remain strong, there are signs that ETFs may stall as spot CVD (the difference between exchange-traded orders) stabilizes over the weekend.

We believe that the potential for market volatility this week is quite high due to investors' expectations of the Federal Reserve's interest rate decision."

They stated: "Whether it's a 25 or 50 basis point rate cut, it could swing market sentiment between bullish optimism and cautious risk-off."

"Meanwhile, the correlation between Bitcoin and stocks is intensifying, indicating that the trend in traditional financial markets may increasingly influence Bitcoin's price."

They pointed out: "Although the recent stock correlation has increased significantly, Bitcoin has recently decoupled from gold, with its price falling while gold has reached an all-time high."

Analysts said: "This divergence, characterized by a negative correlation, reflects a risk-averse market sentiment, with investors favoring traditional safe-haven assets like gold over more speculative options like Bitcoin."

"We believe that this trend may intensify in the lower time frame after the rate cut.

Therefore, the only certainty in the near future is an increase in local volatility at these price levels.

Traders and investors should be prepared for potential rapid and significant price movements."

Their observations on volatility and the correlation between Bitcoin and stocks remained unchanged during early Monday trading, as the stock market also opened under pressure, and market watchers were preparing for the first interest rate cut in years.

At present, major indices are mixed, with the Dow Jones up 0.37%, while the S&P and Nasdaq are down 0.19% and 0.91% respectively.

The possibility of a 50 basis point rate cut over the weekend continues to rise, with the CME Group's FedWatch Tool showing that Wall Street now sees a 57% chance of a more significant rate cut, up from 30% last week.

At present, Bitcoin is trading at $57,780, down 4.15% on the 24-hour chart.