Originally published on: August 01, 2024
Following the Bank of England’s interest rate cut, Bitcoin may be poised for a breakout in its price. The recent decision to lower interest rates by 0.25% to 5% could provide the momentum needed for Bitcoin to surge.
Although economists were divided on whether the central bank would cut rates, the move is expected to benefit risk-on assets like Bitcoin and gold. Despite this, Bitcoin’s price has remained stagnant after the rate cut announcement.
Currently trading below $65,000, Bitcoin saw a 2.4% dip in the 24 hours following the interest rate cut. This lackluster performance could be attributed to the Federal Reserve’s decision to keep rates steady in August.
However, analysts predict that a potential rate cut by the US in September could inject new liquidity and drive Bitcoin’s price higher. This anticipation comes as US-based spot Bitcoin exchange-traded funds (ETFs) experience slowing inflows, indicating a shift in investor sentiment.
ETF inflows have historically played a significant role in driving cryptocurrency prices, with Bitcoin ETFs contributing substantially to its price appreciation earlier this year. As the market awaits further developments, Bitcoin’s price outlook remains uncertain but optimistic.
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