Ahead of US inflation data on Wednesday, bitcoin has posted significant gains of more than 2%, trying to regain the $61,000 level.
Sentiment among investors has improved due to growing expectations of a deeper interest rate cut by the Federal Reserve (Fed). More moderate US inflation is anticipated, which could allow for interest rate cuts. Lower rates are favourable for cryptocurrencies, as they increase the liquidity available to these markets.
In recent hours, gains have allowed the world’s largest cryptocurrency to touch and surpass $61,000 at times, recovering from last week’s heavy losses. It is worth remembering that bitcoin reached its all-time high on 14 March, with a value of $73,805, and so far this year it has appreciated by more than 44%.
In recent sessions, lower risk appetite has affected cryptocurrency market prices in general, including bitcoin. On Tuesday, bitcoin is trading up close to 1%. Recently, the price of bitcoin has formed a technical pattern known as the ‘Death Cross’, which occurs when the short-term moving average (over 50 periods) crosses below the long-term moving average (over 200 periods). This pattern suggests a bearish trend and reflects a bearish sentiment among investors, although it is not an infallible indicator.
The current bearish trend in the bitcoin market could continue for a few more days, mainly influenced by global uncertainty. However, in the medium to long term, the outlook for bitcoin remains optimistic.