As the Federal Reserve (Fed) tries to fight inflation, analysts from Goldman Sachs, one of the world’s largest investment banks, expect the FOMC to end the rate hike process in September. Analysts anticipate that the Fed will take a permanent break from rate hikes and instead keep the rates steady before following with cuts. Market observers emphasize that a permanent break from rate hikes would generally be positive for Bitcoin (BTC) and altcoins.
Goldman Sachs Analysts: Fed to Begin Rate Cuts in 2024
Goldman Sachs analysts made an important comment about the possibility of continued rise in both the stock market and the cryptocurrency market in the medium term, with their prediction that the Fed will start cutting interest rates from June 2024 onwards. Analysts expect the Fed to cut rates every three months after the initial rate cut. Goldman Sachs analysts, including Jan Hatzius and David Mericle, stated in their investor note published on August 13, “The rate cut scenario we anticipate arises from the desire to normalize interest rates when inflation approaches the target.”
Goldman Sachs analysts believe that rate cuts will likely begin in mid-2024. It is expected that the Federal Open Market Committee (FOMC), the committee responsible for determining the interest rate, will not make a rate hike decision until the next month. Analysts warned, “Normalization is not especially strong motivation for a rate cut. Therefore, there is a significant risk that the FOMC will keep the rates steady instead. After that, we expect a 25 basis point rate cut per quarter, but we are not yet certain about the pace.”
Can Bitcoin Rally After September?
Both the stock market and the cryptocurrency market have seen significant gains since the beginning of the year. While the technology-heavy Nasdaq Composite has risen by 31% since the start of the year, the price of Bitcoin (BTC) has increased by 77% during the same period, although the largest cryptocurrency has been experiencing a period of low volatility in recent years.
Over the past few weeks, the price of Bitcoin has been hovering just above $29,000 and has not found sufficient support for further price movement. However, there has been continued accumulation of BTC with the participation of new whales and individual wallet addresses in the Bitcoin network. The price of Bitcoin has remained above the support level of around $29,200, without changing its technical situation. Currently, BTC is moving without showing a clear upward or downward trend as it struggles to rise above $29,600 on the four-hour time frame.
In the short term, if Bitcoin manages to break above the $29,600 level with a potential rally, it may climb to around $30,200. If the price surpasses the $30,200 resistance, a further increase towards the resistance zone between $30,600 and $31,000 can be expected.
