Bitcoin Price May Reach $64,000 ‘Quickly’ Following Fed Rate Cuts

Bitcoin could be on track to experience significant growth in its bull market, driven by favorable macroeconomic changes and the natural timing of market cycles, according to insights from Capriole Investments.

Bitcoin (BTC) is anticipated to reclaim the $64,000 mark “very quickly” as the U.S. Federal Reserve is expected to lower interest rates.

In its latest report released on September 17, Capriole Investments highlighted that BTC’s recent price movements are at a crucial juncture.

Capriole Founder Expects $64,000 BTC

Charles Edwards, founder of Capriole Investments, noted that Bitcoin is likely to benefit greatly from macroeconomic shifts entering Q4, which is historically the strongest quarter for the cryptocurrency.

BTC/USD has seen little movement over the last month, but it is now poised for traditional bull market dynamics if the Federal Reserve announces a rate reduction at its September 18 meeting.

The report stated, “This marks the beginning of a new dovish Fed policy, which is a significant change after the hawkish stance that began in late 2021, leading to an increase in rates from 0% to 5.5% within just 18 months.”

“This hawkish regime coincided with Bitcoin’s drop from $60,000 to $15,000. We are now entering the opposite environment.”

Assuming no unexpected negative announcements from the Fed, BTC/USD could target $64,000, supported by weekly data from sources like Cointelegraph Markets Pro and TradingView.

“Currently, despite being in a lower low trend, the weekly support at $58,000 is holding strong. A week-end closure above $64,000 would break a seven-month sequence of lower highs, potentially pushing us towards the $70,000 mark quickly. However, the technical outlook remains mixed to bearish until we breach the $60,000 range,” Edwards added.

“Given the response at the weekly $58,000 level and the significant Fed event approaching, I wouldn’t be surprised to see a rapid move upwards, assuming no bearish surprises from Chairman Powell.”

Bearish Trends in Bitcoin Onchain Supply Data

The report dismissed concerns about changing BTC supply trends, indicating that new factors, such as the U.S. spot Bitcoin ETFs, have distorted usual metrics.

“The landscape has seen significant capital reallocation due to ETF launches and events surrounding Mt. Gox, skewing many on-chain metrics and creating a misleading narrative,” Edwards stated.

Additionally, he pointed out that the metrics related to supply ownership by time dormant—rooted in the definitions of “long-term holder” versus “short-term holder”—are unreliable in the current year.

“Over the past six months, on-chain metrics have been heavily influenced by major supply reclassifications, which have not seen any considerable organic sales from long-term holders. This has led to extremely bearish readings similar to those observed at previous market peaks,” the report explained.

“Thus, any on-chain metrics incorporating data on the ‘long-term holder’ category or ‘supply last active more than XX months’ are not trustworthy in 2024. These classifications serve as the foundation for a substantial portion of valuable on-chain analytics.”

Edwards, however, remains optimistic regarding BTC/USD’s mid-term outlook.

“Given that Bitcoin is trading within 2% of our previous update, our assessment from Issue 53 holds; we are at a critical turning point,” he concluded.

He also emphasized the timing of the Fed’s easing measures, noting that Q4 typically sees some of Bitcoin’s best performances, alongside the conclusion of its standard consolidation period post-halving.

“Looking ahead, we are just two weeks away from the two best seasons of the year, which also coincide with the most favorable 12-18 month investment windows for Bitcoin occurring every four years, along with the onset of a dovish Fed policy that will introduce increasing liquidity into risk assets,” he explained.

“Furthermore, gold has been setting new all-time highs since its breakout months ago. The conditions could not be more favorable for Bitcoin.”

This information is intended for educational purposes and does not constitute investment advice. All investments carry risk, and individuals should conduct their own research prior to making investment decisions.