As a researcher with a background in financial markets and experience in analyzing gold and Bitcoin prices, I’ve been closely monitoring the recent trends. The past few weeks have seen gold prices surge due to geopolitical tensions in the Middle East, only to experience a decline in the last few days. This price volatility can be attributed to the upcoming Federal Reserve (Fed) monetary policy decision and non-farm payrolls data.
Gold’s price has surged dramatically in response to geopolitical turmoil in the Middle East, but it has started to drop over the past week. The FOMC meeting held on April 30 and May 1 added to gold’s downturn as investors grew anxious about the possibility of prolonged higher interest rates from the U.S. Federal Reserve. With demand for safe-haven assets decreasing, could Bitcoin experience a similar decline and fall below $60,000?
Gold Price Plunge Jitters Bitcoin Fall to $60K
I, as an analyst, would put it this way: Gold declined by 1% on Tuesday, hovering around the $2,300 mark per ounce. The anticipation built up ahead of the Federal Reserve’s monetary policy decision and the upcoming non-farm payrolls data scheduled for later in the week. Market participants were eagerly looking for indications regarding the Fed’s stance and any potential remarks from Jerome Powell that could influence rate cuts, with recent US economic data dampening expectations in this regard.
The latest PCE data revealed ongoing inflationary forces, while Q1 GDP expanded at a modest 1.6%. This economic scenario exhibits elements of stagflation. The Federal Reserve seeks fresh evidence of decreasing inflation to keep its interest rate unchanged at 5.25%-5.5%. Prediction markets forecast only one rate reduction in 2023, suggesting a persistent hawkish approach from Chair Jerome Powell during the upcoming meeting.
As a crypto investor, I’ve noticed that higher interest rates can make holding non-yielding assets like gold less appealing. However, even with this decreased appeal, gold has continued to maintain support due to strong physical demand, particularly from China, and geopolitical risks in the Middle East that keep tensions high.
Bitcoin Price to Fall Under $60K
Matrixport indicates that both implied and actual volatility are decreasing rapidly but remain elevated compared to anticipated levels in 2023. Traders employ strategies similar to those used during the volatile market conditions in 2022 to generate appealing returns. Nevertheless, following the Bitcoin halving event’s completion, Matrixport anticipates reduced volatility and slower price fluctuations during the summer months.
As a crypto investor, I understand that there could be heightened volatility in the US trading sessions based on the anticipated hearing of Changpeng “CZ” Zhao’s sentence and the reactions following the underwhelming debuts of Hong Kong’s spot Bitcoin and Ether ETFs.
Experts predict that the Bitcoin price may dip below $60,000 to foster a healthier crypto market recovery. Currently valued at $61,062, Bitcoin has experienced a 5% decrease from its peak price of $64,703. The dominance of BTC in the market has exceeded 53.7%.
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2024-04-30 16:21