Bitcoin hits a two-month high, with gold correction becoming a boost
Bitcoin's price broke $97,000 on May 1, reaching a new high in nearly two months. Market analysts believe that this surge is closely related to the correction in gold prices and expectations that the Federal Reserve may lower interest rates early. After gold briefly broke the historical high of $3,500 per ounce on April 21, it has recently fallen back to around $3,200, a decline of nearly 10%. In contrast, Bitcoin has risen about 10%, climbing from $87,000 in mid-April to the current level of $97,000.
Standard Chartered analyst Geoff Kendrick stated, 'I believe Bitcoin is more effective than gold in hedging the risks of the US strategic asset reallocation.'
He specifically pointed out that the inflow of ETF funds has reversed, with funds flowing into Bitcoin funds exceeding those flowing into gold funds. Kendrick also mentioned that the last time the inflow of Bitcoin ETF funds significantly outpaced gold was during the week of the US presidential election. Two months later, Bitcoin's price rose over 40%, breaking through $100,000. This historical pattern may suggest that the current flow of funds will drive Bitcoin to new highs.
Source: Geoffrey Kendrick Bitcoin and Gold Price Relationship Chart
Weak US economic data and rising expectations of interest rate cuts boost the attractiveness of cryptocurrencies
The latest US GDP data shows signs of economic contraction, and this weak performance has prompted market expectations that the Federal Reserve may lower interest rates early to stimulate economic activity.
According to CME's FedWatch data, the probability of the Federal Reserve lowering interest rates at the Federal Open Market Committee (FOMC) meeting on June 18 is 57.8%. Historical experience shows that expectations of interest rate cuts are usually a favorable catalyst for risk assets and Bitcoin. For example, before the last rate cut by the Federal Reserve on December 18, 2024, Bitcoin rose over 20%.
Source: FedWatch Probability of the Federal Reserve's target interest rate at the June 18 meeting
Anonymous Bitcoin analyst BTCmoonmath posted on the X platform, 'Bitcoin is rebounding to $95,000, bouncing back from the bearish sentiment brought on by weak US GDP data. Despite economic contraction and low consumer confidence, traders still expect the Federal Reserve to ease policy and lower interest rates in the future.'
Market attention has now shifted to the employment report scheduled to be released on May 2, which will reveal the number of new jobs added in the US economy for April. This will further impact the cryptocurrency market and Bitcoin price trends.
Technical indicators show that a breakout is imminent, and analysts are optimistic about a push towards $100,000
Currently, Bitcoin has broken through the key level of $95,000, and many analysts believe this will allow Bitcoin to break upward quickly. Market intelligence company Glassnode pointed out in its latest 'On-Chain Weekly Report' that Bitcoin's price has recently surpassed two key technical levels: the 111-day simple moving average (SMA) at $91,300 and the short-term holder (STH) cost basis at $93,200. Bitcoin has recently regained these levels during the surge, highlighting the strong momentum behind this upward move.
Source: Glassnode Bitcoin: Short-term holders' realized price and 111SMA
Renowned analyst AlphaBTC stated in his latest analysis on the X platform, 'Bitcoin is ready to break $96,000.' He believes that if Bitcoin decisively breaks $95,000, it may escape its consolidation phase, with the next reasonable target being the psychological level of $100,000. 'If Bitcoin can maintain this trend today, I hope to see a beautiful big squeeze up to the low of $100,000.' Conversely, if it falls below the April 30 low of $93,000, Bitcoin may further decline to the range of $84,000 to $88,000.
Source: AlphaBTC AlphaBTC believes that Bitcoin is expected to return to $100,000
Another cryptocurrency analyst, Daan Crypto Trades, added that if the price continues to consolidate and slowly rise without a significant pullback, Bitcoin is likely to attempt a push towards the $100,000 region. With institutional funds continuously flowing into Bitcoin ETFs, rising expectations of interest rate cuts from the Federal Reserve, and some gold investors shifting to Bitcoin, the market generally believes that the time for Bitcoin to break through the $100,000 barrier may be near.
This content is compiled by Crypto Agent from various sources, reviewed and edited by (Crypto City). It is still in the training phase and may contain logical biases or information errors. The content is for reference only and should not be considered investment advice.
'Bitcoin breaks $97,000! Increased probability of interest rate cuts, gold correction support, is $100,000 not far away?' This article was first published on 'Crypto City'
