Anika Begay
Bernstein Analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia provided insights on when Bitcoin price could turn bullish and hit new highs. The analysts also touched on the impact that former US President Donald Trump could have on Bitcoin’s trajectory.
When Bitcoin Price Will Turn Bullish Again
Bernstein analysts mentioned in an August 5 research note that they expect Bitcoin and the broader cryptocurrency market to recover if stock markets recover due to a response from the Federal ReserveThey expect this response to come in the form of a rate cut and the injection of greater liquidity into the economy.
These analysts said that the recent cryptocurrency market crash was not Bitcoin’s fault this time, but was large due to “stock market fears” and other macroeconomic factors. The US stock market is currently facing a massive decline amid fears that the US economy may enter a recession.
Because of his historical correlation With these actions, Bitcoin also experienced a wave of massive selling, which began over the weekend. This caused the flagship cryptocurrency to fall below $50,000 for the first time since February of this year. The broader cryptocurrency market followed suit, as altcoins suffered massive price drops.
Chhugani, Sapra and Chindalia expect the macro side to continue to impact Bitcoin and the cryptocurrency market for most of this third quarter. There have been speculations that the Fed could cut interest rates next month FOMC meeting in September, which will undoubtedly be positive for risk assets, including cryptocurrencies.
Interestingly, market experts such as renowned economist Jeremy Siegel have called for an emergency rate cut on top of the expected rate cut that could come in September. However, it remains to be seen whether the Fed will succumb to such pressure, especially since they do not appear to be convinced that the US is close to a recession.
The US election is another factor that these analysts expect to impact BTC and the broader cryptocurrency market. They said that Bitcoin “remains a ‘Trump trade’” and expect these cryptocurrencies to continue to be range bound until after the election. Bitcoin is expected to react positively if Trump ultimately wins, as he is seen as more crypto-friendly than the Democratic presidential candidate. My life is nice.
BTC outlook still bullish
Despite the recent decline, these Bernstein Analysts remain bullish on Bitcoin in the long term, noting that there are no “incremental negatives for cryptocurrencies” at the moment. They hinted at the trend of institutional adoption of BTC through the Bitcoin Spot ETFswhich provides a bullish outlook as more institutional investors continue to adopt the flagship cryptocurrency.
These analysts expect more “wirehouse approvals in the third and fourth quarters, thus providing further on-ramps for asset allocation to Bitcoin.” Powerhouse Morgan Stanley has as they say has informed its financial advisors that they will be able to begin offering these Spot Bitcoin ETFs to their wealthy clients starting August 7.
Featured image from PCMag, chart from TradingView.com
