After a period of decline, Bitcoin is showing signs of stabilizing as major macroeconomic pressures begin to ease, with experts suggesting the top cryptocurrency may be bottoming out. According to data from CoinGecko, Bitcoin rose nearly 2% over 24 hours, hitting a high of $109,405, sparking a slight rally across the broader altcoin market.
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“I think bitcoin has bottomed out here,” said Peter Chung, head of research at Presto Research. “I expect the next step will likely be up rather than down.” The potential bullish reversal comes on the heels of the Fed’s dovish pivot last week, with Chairman Powell signaling that quantitative tightening may be coming to an end and that interest rate cuts are on the table.
As the end of the QT period approaches, risk assets may benefit from easing adverse financial conditions as liquidity withdrawals slow. Meanwhile, the US-China trade war, which previously caused a historic series of liquidations earlier in the month, is also expected to calm down this week, with Treasury Secretary Scott Besent and Deputy Prime Minister He Lifeng meeting in Malaysia to further defuse tensions.
Sean Dawson, head of research at Dervie, echoed Chung’s sentiments, but warned that risks remained. “This is likely to be a local bottom,” Dawson said. “Low interest rates push investors up the risk curve toward assets like cryptocurrencies.” “However, the risk of escalation in the US-China trade war could cause further faltering.”
The immediate future of Bitcoin and the broader cryptocurrency market depends on Friday’s upcoming inflation report, although the outcome of trade negotiations between the US and China has a greater impact on market sentiment. “Bitcoin is very sensitive to these conversations,” Dawson said, noting that the biggest price moves this year came after tariff announcements. “If there is a positive resolution to these concerns, we are likely to see a significant upside.”
Looking ahead, the Fed’s plan to end quantitative tightening, which involves reducing the central bank’s balance sheet, “will be bullish for Bitcoin,” Dawson said, noting that the return of liquidity creates a more favorable environment for speculative assets. The interest rate is expected to be cut by a quarter of a percentage point before the Federal Reserve’s next crucial meeting, scheduled for October 29, according to bond traders.
Dawson added that while a larger-than-expected rate cut would be positive for Bitcoin’s price movement, “this will continue and emerge over longer time horizons likely by the first quarter of next year.”
Source: Market intelligence platform IndexBox
