Bitcoin (BTC) has fallen more than 4% in the last 24 hours to drop below $60,000. However, a retest of $74,000 is possible in the coming weeks, at least considering the Wyckoff reaccumulation pattern is maturing and the increased likelihood of three rate cuts by the end of 2024.
Bitcoin Testing Core Spring Support
The Wyckoff Reaccumulation Pattern is a technical setup that identifies a consolidation and accumulation phase following a long-term uptrend.
In this pattern, the price usually goes through nine important stages: Reserve Supply (PSY), Buy Peak (BC), Automatic Reaction (AR), Second Test (ST), Spring, Test, Last Support (LPS) and finally Signal of Strength (SOS).
As of August 4, Bitcoin has entered the “test” phase of the Wyckoff Reaccumulation Pattern.
At this stage, the cryptocurrency is testing the spring lows around $53,400 and is using this as support to confirm the continuation of the bullish move towards the new Last Support Point (LPS) around $70,000 as shown in the chart shared by independent analyst Moustache on the X channel.
According to the Wyckoff Reaccumulation Rule, a new uptrend begins when Bitcoin retests the highest level of the Wyckoff pattern, around $74,000, and then enters the ninth and final stage, called the Signal of Strength (SOS).
This last stage indicates a strong uptrend and market strength, indicating a definite uptrend.
Three Rate Cuts Likely in 2024 Amid Recession Risks
Bitcoin prices have fallen 10% along with U.S. stock markets since August 1, when the U.S. reported its highest unemployment claims in nearly a year and a decline in manufacturing activity. Bitcoin exchange-traded funds (ETFs) have seen withdrawals of about $200 million over the same period.
What’s interesting is that Bitcoin is showing a downward trend despite the fact that interest rates are likely to be cut not once, but three times in 2024. This is a significant departure from the trend that crypto markets have often embraced over the past year, when weak economic indicators were often welcomed.
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The decline appears to follow a recent U.S. jobs report that has led to increased warnings of a recession.
Historically, Bitcoin has struggled during periods of heightened recession fears. For example, during the COVID-19 market crash in March 2020, Bitcoin fell along with the U.S. stock market. As the Federal Reserve implemented quantitative easing and cut interest rates, Bitcoin’s price began to rebound.
Many cryptocurrency analysts, including Michael van de Poppe, expect a similar price trend in the coming weeks. In other words, Bitcoin will face recession risk but will bounce back after the Fed cut rates in September.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.