Bitcoin Price Drops To $58K, Can the FED’s Interest Rate Decision Ignite Bull Run?

Bitcoin (BTC) price closed last week trading above a crucial support level of around $58k, despite facing significant resistance between $60k and $61k. The flagship coin signaled a potential bullish recovery after being trapped in a bearish correction mode for the past six months. 

Furthermore, the fourth quarter, one of the most bullish periods for the crypto industry, will begin in less than two weeks. 

Additionally, Gold’s price has been rising and reached its all-time high of about $2,588 earlier today. Ordinarily, Gold’s bullish breakout signals that Bitcoin and the altcoin industry will follow the same trend in the near term.

Economic Shift Outlook

After more than three years of taming the dollar inflation, the US Federal Reserve is likely to cut its first interest rate on Wednesday. Both CPI and employment data in the recent past show the odds of the first interest rate cut since the COVID-19 pandemic will begin on Wednesday.

Moreover, the European Central Bank (ECB) has made three interest rate cuts this year, while Canada has cut its benchmark rates twice a year to date.

The economic shift in the United States will further improve overall liquidity, which is perceived as a bullish sentiment for the so perceived as risky assets. Additionally, the upcoming US general election will be a major turning point for the crypto industry for the next four years depending on the winner.

Midterm Bitcoin Price Expectations 

From a technical standpoint, Bitcoin price could drop towards the support level around $54k again if the bulls fail to defend the crucial support level above $58k. Some Wall Street analysts have argued that the Fed’s interest rate cut on Wednesday could easily turn into a sell-the-news event. 

However, the bearish sentiment for Bitcoin price could be invalidated if the flagship coin consistently closes above $60k in the coming days. In such a scenario, Bitcoin dominance could scale towards 60 percent, and further delay the much-anticipated altcoin season.