Bitcoin Falls Back After Attempt at $72K, but Fed, U.S. Data and Global Rate Cuts May Bring New All-Time Highs

One observer noted that Bitcoin spot sales on exchanges were putting pressure on prices due to short-term derivative positions forming around $72,000.

Weak US economic data and interest rate cuts could be a harbinger of the Fed meeting next week.

Bitcoin {{BTC}} is increasingly stuck in a tight range as the latest effort to surpass $72,000 stalled on Thursday.

According to CoinDesk’s Bitcoin index data, BTC rose to $71,700 in the early hours of the day following the European Central Bank (ECB) interest rate cut, but quickly fell back below almost $70,000, falling nearly 1% in the last 24 hours to $70,600 at the time of writing. jumped. shows.

Well-followed market analyst Skew noted that concerted spot selling activity on crypto exchanges Binance and Coinbase and the simultaneous formation of short-term futures positions in derivatives markets put pressure on prices.

CoinGlass data shows that significant leverage has formed around the $70,000 and $72,000 price area and could be liquidated if there is a breakout from the narrow trading range in either direction.

Bitcoin liquidation heat map (CoinGlass)

The broader crypto market has also experienced a downturn; The CoinDesk 20 Index is down 1% in the last 24 hours. Decentralized exchange Uniswap’s token {{UNI}}, oracle network Chainlink’s LINK, and layer-1 blockchain Near’s NEAR fell 3%-5% during the same period.

Read more: Bitcoin Mining Shares Soar Amid Takeover Frenzy

Cosmos-based blockchain Injective’s native token (INJ) defied the broader trend, gaining 5% following the project’s tokenomics update aimed at making the asset more deflationary and reducing supply through token burns.

Despite Bitcoin’s struggle to surpass the $72,000 level, analysts are calling for a rally to new record highs to occur soon as macro conditions turn in favor of risky assets.

Central banks in advanced economies began to ease monetary policy; The ECB and the Danish central bank cut benchmark interest rates by 25 basis points today. The Bank of Canada cut interest rates earlier this week and its Swiss counterpart also cut rates in March.

The big question ahead is whether the US Federal Reserve will join the interest-cutting trend, and while some members of that central bank have suggested that any QE could be a 2025 story, recent data has shown a softening in both inflation and economic growth. Tomorrow comes the government’s May employment report, and a weak reading could increase the chances of a Fed rate cut soon.

The latest inflation data will be available at the end of this month. “CPI [Consumer Price Index] “Next week’s announcement could potentially trigger a new all-time high for BTC,” QCP said in a market update.

Geoffrey Kendrick, Standard Charter’s head of forex and digital assets research, reiterated his $150,000 price target for BTC by the end of the year in his report on Thursday, noting the possibility of a breakout to new all-time highs in the next few days. “If tomorrow’s employment data is positive, I would expect an all-time high to be reached over the weekend,” he wrote.