Pre Open US - Bitcoin 14 Aug 2023

Goldman Sachs economists, including Jan Hatzius and David Mericle, predict potential interest rate cuts by the Federal Reserve by June 2024, aiming to normalize rates as inflation nears the target. This adjustment reflects Goldman's view that current rates might be too restrictive amid inflation trends. However, the bank acknowledges the uncertainty of the Federal Reserve's decisions, highlighting the possibility that they might maintain the status quo.

Recent data indicating a slower-than-expected rise in US inflation at 3.2%, with a 4.7% annual pace for the core consumer price index, complicates the outlook. With the Fed's benchmark rate between 5.25% to 5.5%, Goldman Sachs anticipates stabilization around 3 to 3.25%.

These projections align with market expectations, as indicated by the CME FedWatch Tool, with 68% anticipating a minimum 25 basis point rate cut by May 2024.

The potential convergence of favorable factors could positively impact the Bitcoin market. Coinciding with Bitcoin ETF filing deadlines from BlackRock, Fidelity, Investco, VanEck, and WisdomTree on March 15, 2024, Bitcoin halving is expected by the end of April (around April 26). These events, coupled with the Federal Reserve's accommodative policy, might serve as a substantial catalyst for Bitcoin's price.

Technically, on the daily chart, it appears that yesterday's breakout on shorter time frames might be false, given that the price action is still clinging to the resistance level of 29790. A genuine breach of the current resistance could propel the price towards 31000, while a selloff might lead BTC back to the 100-day moving average on the daily chart.