BTC Price Forecast: Bullish Momentum Builds as Fed Cuts Rates by 50 Basis Points

Bitcoin Targets $62,000 Following Fed’s Surprise Rate Cut

On Wednesday, September 18, BTC advanced by 2.41%, following a 3.71% rally from the previous session, closing at $61,774. BTC tracked the broader crypto market, which gained 2.09% to a market cap of $2.082 trillion.

US Federal Reserve Fuels BTC Demand

On Wednesday, the US Federal Reserve cut interest rates by 50 basis points, contrasting with the expectation of a 25-basis point Fed rate cut. The Fed cut rates more aggressively than expected while signaling a soft US economic landing, boosting BTC demand.

According to the FOMC Economic Projections, the FOMC Committee expects the US economy to expand by 2.0% in 2024, down from June’s 2.1% projection. Projections for 2025 and 2026 remained unchanged at 2.0%, supporting bets on a soft US economic landing.

Additionally, the Fed signaled a more dovish Fed rate path. The FOMC expects the Fed Funds Rate to fall to 4.4% by December 2024, compared to June’s estimate of 5.1% and to 3.4% in 2025 (June projection: 4.1%).

US BTC-spot ETFs Face Outflows Despite BTC Rally

Despite the BTC rally, the US BTC-spot ETF market faces the prospect of net outflows. The Nasdaq Composite Index succumbed to investors selling the news, with the US BTC-spot ETF market possibly suffering a similar fate.

According to Farside Investors:

• ARK 21Shares Bitcoin ETF (ARKB) saw net outflows of $43.4 million (previous day: +$42.2 million).
• Grayscale Bitcoin Trust (GBTC) had net outflows of $8.1 million (previous day: zero).
• Bitwise Bitcoin ETF (BITB) reported net outflows of $3.9 million (previous day: +$45.4 million).
• Grayscale Bitcoin Mini Trust (BTC) bucked the trend, with net inflows of $2.7 million (Previous session: zero)

Excluding iShares Bitcoin Trust (IBIT) flows, US BTC-spot ETFs saw $52.7 million in net outflows on September 18, down from net inflows of $186.8 million the previous day. On Wednesday, the Nasdaq Composite Index fell by 0.31%.

Upcoming US Economic Data Could Influence BTC Trends

On Thursday, September 19, US labor market data could further influence BTC-spot ETF flows and BTC price trends.

Economists expect initial jobless claims to remain unchanged at 230k in the week ending September 14. An unexpected spike in jobless claims may test the Fed’s growth forecasts, possibly impacting BTC demand. Conversely, lower-than-expected claims could further ease fears of a hard US economic landing, boosting BTC demand.

Positive claims data could push BTC toward $65,000, while a spike in claims could send BTC down toward $55,000.

Other stats include the Philly Fed Manufacturing Index and housing sector data that will likely play second fiddle to the labor market data. The debate over the November Fed interest rate decision has already begun as focus turns to US labor market data.

Arch Capital Global Chief Economist Parker Ross remarked,

“ Now that we have the September FOMC out of the way, let’s start the waaaay too early debate about the November meeting… Reminder, the FOMC decision will be announced on Nov 7, mere days after Election Day for those who observe.”

Investors should remain alert, with US labor market data likely to be crucial for BTC and the broader market. Stay updated with our latest news and analysis to manage your BTC and crypto exposures.

Technical Analysis

Bitcoin Analysis

BTC hovers above the 50-day and 200-day EMAs, affirming bullish price signals.

A breakout from $62,500 would support a move toward the $64,000 resistance level. Furthermore, a break above the $64,000 resistance level could give the bulls a run at the $67,500 handle.

Investors should consider BTC-spot ETF market trends and US labor market data.

Conversely, a break below the $60,365 support level could bring 50-day and 200-day EMAs into play. A fall through the EMAs could give the bears a run at the $55,000 level.

With a 59.10 14-day RSI reading, BTC could break above the $64,000 resistance level before entering overbought territory.

Ethereum Analysis

ETH remains well below the 50-day and 200-day EMAs, affirming bearish price trends.

An ETH break above the $2,403 resistance level could bring the $2,500 level into play. Furthermore, a breakout from $2,500 would support a move toward the $2,664 resistance level.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH drop below $2,200 could give the bears a run at the $2,124 support level. A fall through the $2,124 support level may bring $2,000 into play.

The 14-period Daily RSI reading, 46.11, suggests an ETH break below the $2,124 support level before entering oversold territory.