- Crypto Market Cap Decline
- Analysts' Bitcoin Correction Predictions
- Impact of US Interest Rates on Bitcoin
The fall of the global crypto market cap below a key psychological level could trigger a significant price correction for Bitcoin.
Crypto Market Cap Decline
The global crypto market capitalization fell below $2 trillion, a decrease of 3.46% in the 24 hours leading up to 10 am UTC, Sept. 4, according to CoinMarketCap data.
Analysts' Bitcoin Correction Predictions
Combined with the growing sell-off in traditional markets, this resulted in Bitcoin falling below the $60,000 psychological mark. According to Alex Kuptsikevich, senior market analyst at FxPro, a reversal requires Bitcoin price correction to $54,000. "Bitcoin fell to $55.5K at the peak of the decline before stabilizing at $56.4K. Current levels acted as support during the May and July declines, but the trend of lower local lows sets up a reversal at $54K at the earliest," said the analyst.
Impact of US Interest Rates on Bitcoin
September could bring a long-awaited interest rate cut in the US, the world’s largest economy, which is a positive signal for risk assets like Bitcoin. However, Bitcoin’s bull run could precede a correction below $50,000 following the interest rate cut, according to Bitfinex analysts. “If we were to speculate, we would caution to expect a 15-20 percent decline when rates are cut this month, with a bottom of $40k-50k for BTC. This is not an arbitrary number but based on the fact that the cycle peak in terms of percentage return reduces by around 60-70 percent each cycle and the average bull market correction has reduced as well,” noted the analysts. Investors increasingly expect an interest rate cut from the United States Federal Reserve at its upcoming meeting on Sept. 18.
The dynamics of the cryptocurrency market remain uncertain, with potential significant Bitcoin corrections in the near future. US interest rate cuts and macroeconomic conditions will continue to affect the cryptocurrency rates.
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