Bitcoin (BTC) Price Not Yet Out of Downtrend as Jerome Powell\'s Cautious Stance Adds to Market Uncertainty

Bitcoin's (BTC) slight correction during US trading hours underscores ongoing uncertainty as Federal Reserve Chair Jerome Powell's cautious stance on potential interest rate cuts adds to market volatility.

Bitcoin’s slight correction during U.S. trading hours highlights the ongoing uncertainty in the market. Federal Reserve Chair Jerome Powell’s cautious stance on potential interest rate cuts adds to this volatility, impacting digital assets like Bitcoin.

Powell stated that the U.S. is "no longer an overheated economy" and that the case for interest rate cuts is getting stronger, as reported by Reuters. He added that inflation has been improving in recent months, and "more good data would strengthen" the argument for looser monetary policy.

"Bitcoin is not yet fully out of its downward trend, as it experienced a slight correction during US trading hours—a recurring pattern over the past few weeks. Yesterday, Jerome Powell commented on potential rate cuts, stating that while we still have quite a way to go, they would occur before inflation reaches 2%, provided that disinflation has sufficient momentum," BRN analyst Valentin Fournier said.

The cryptocurrency market is highly sensitive to signals from the Federal Reserve regarding its policy stance. Powell's cautious approach indicates a measured response to economic indicators, which could prolong market uncertainty. This cautious sentiment may influence investors' sentiment towards Bitcoin and other digital assets in the short term.

Fournier also highlighted broader economic indicators, such as a declining Services Purchasing Manager’s Index and higher unemployment levels, which could suggest a more severe U.S. recession than previously anticipated. This scenario might accelerate interest rate cuts and government stimulus, which could potentially spark a rally in cryptocurrencies.

Bitcoin’s slight correction during U.S. trading hours, following a strong rally, highlights the ongoing market volatility. The Federal Reserve's cautious approach to potential interest rate cuts adds to this uncertainty, impacting digital assets like Bitcoin.

Powell's statements suggest that the U.S. economy is cooling, strengthening the case for interest rate cuts. However, the central bank will prioritize ensuring disinflation before resuming rate cuts.

Fournier's analysis indicates that Bitcoin's downward trend is nearing its end, with upcoming economic data and potential market dynamics presenting opportunities for Bitcoin to regain momentum and exceed previous highs.

"Our view remains optimistic. Bitcoin has absorbed prior selling pressure and could benefit from upcoming CPI data and a potential short squeeze. We anticipate cryptocurrencies to outperform traditional assets in the coming months," Fournier added.

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