Bitcoin Rises to $84K Amid Market Optimism, But Analyst Warns of Potential Downturn
Bitcoin (BTC) saw a modest uptick on Monday, climbing above $84,000 as broader crypto markets followed U.S. equities in a positive trend. However, some analysts caution that another pullback may be on the horizon.
Market Overview
The CoinDesk 20 Index, which tracks a broad selection of cryptocurrencies, posted a 2.4% gain over the past 24 hours, reflecting the market’s upward momentum. Ethereum (ETH) also advanced, stabilizing above $1,900 with a 2.8% increase. Major altcoins, including SUI, AAVE, ICP, and NEAR, outperformed with gains exceeding 5%.
Solana (SOL) rose by 3% despite the launch of SOL futures on the institutional trading platform CME, which had little impact on investor sentiment. Meanwhile, Ethena’s governance token (ENA) surged by 7% following news of a collaboration with Securitize to develop a proprietary blockchain aimed at bridging decentralized finance (DeFi) with traditional financial institutions.
Analysts Weigh In on Bitcoin’s Future
Despite the recent rally, market experts remain cautious. Joel Kruger, strategist at LMAX Group, warned that ongoing global trade tensions and concerns over a slowing U.S. economy could weigh heavily on risk assets, including crypto.
“When we consider the state of global trade tension and concerns around a slowdown in the U.S. economy, all at a time when it’s increasingly uncertain how much more accommodation the Fed can offer, there is indeed worry that stocks could fall further,” Kruger stated.
He suggested that if equities experience a sustained correction, Bitcoin could retest its March 2024 peak in the $73,000-$74,000 range.
Federal Reserve’s Next Move Could Impact Crypto
The Federal Reserve is widely expected to maintain its current interest rate policy during this week’s Federal Open Market Committee (FOMC) meeting. However, Coinbase Institutional’s head of research, David Duong, noted that traders should closely monitor any potential changes in the central bank’s quantitative tightening (QT) strategy.
“We think the Fed might pause or end its QT program this week, as bank reserve levels are near the 10-11% of GDP threshold commonly considered sufficient for maintaining financial stability,” Duong wrote in a report.
He further explained that the recent crypto selloff was largely driven by macroeconomic concerns and declining liquidity. However, he expects conditions to improve in the coming months, providing a tailwind for asset prices.
“Crypto prices could find their bottom in the next few weeks before rebounding to new highs later this year,” he concluded.
Final Thoughts
While Bitcoin’s rise past $84,000 has reignited optimism, analysts urge caution as macroeconomic factors and market liquidity remain key drivers. Investors will be closely watching the Fed’s policy decisions and broader equity market trends to gauge the next move for crypto assets.