Bitcoin (BTC) has experienced a decline of over 4% in the last 24 hours, dipping below the $60,000 mark. Nevertheless, there is potential for a retest of $74,000 in the forthcoming weeks, primarily due to the developing Wyckoff reaccumulation pattern and the increasing likelihood of three interest rate cuts by the end of 2024.
Currently, Bitcoin is probing key spring support levels. The Wyckoff reaccumulation pattern is a technical framework that highlights stages of consolidation and accumulation following an extended upward trend. This pattern typically consists of nine essential phases: Preliminary Supply (PSY), Buying Climax (BC), Automatic Reaction (AR), Secondary Test (ST), Spring, Test, Last Point of Support (LPS), and the ultimate Sign of Strength (SOS).
As of August 4, Bitcoin has entered the “Test” phase within its Wyckoff reaccumulation framework. During this phase, the cryptocurrency is examining its Spring low—approximately $53,400—as a support level to validate a bullish trajectory toward a new Last Point of Support (LPS) around $70,000, as illustrated in a chart shared by independent analyst Moustache on his X channel.
According to the principles of the Wyckoff reaccumulation pattern, a fresh uptrend will initiate once Bitcoin reaches the ninth and concluding phase, known as the Sign of Strength (SOS), following a retest of the pattern’s peak near $74,000. This final stage indicates robust upward momentum and market vitality, signifying a confirmed uptrend.
**Potential Rate Cuts Loom Amidst Recession Concerns**
Since August 1, Bitcoin’s value has declined by 10%, paralleling the US stock market, coinciding with the release of US unemployment claims that reached a near one-year high and a downturn in manufacturing activities. During this timeframe, Bitcoin exchange-traded funds (ETFs) have seen withdrawals amounting to roughly $200 million.
Interestingly, BTC’s downturn occurs despite the growing probability of three rate cuts in 2024, a notable shift from the prior year when weak economic data typically buoyed crypto markets. This recent decline seems to be influenced by escalating recession warnings following the latest US employment report. Historically, Bitcoin has faced challenges during periods of intensified recession anxiety; for instance, during the COVID-19 market crash in March 2020, Bitcoin’s price fell in sync with the US stock market. It began to recover when the Federal Reserve enacted quantitative easing and reduced interest rates.
Numerous cryptocurrency analysts, including Michael van de Poppe, predict a similar price trend in the coming weeks. In essence, while Bitcoin may confront recession-related risks, a rebound is anticipated following the Federal Reserve’s rate cuts in September.
*This article does not provide investment advice or recommendations. All investment and trading activities carry risks, so readers should undertake their own research before making any decisions.*