Bitcoin (BTC) Price Forecast: $75k Rebound Begins as Whales Flip Bullish

Cryptocurrency

Summary:

Bitcoin (BTC) price rebounded 9% within the daily timeframe on March 20, peaking at $67,857. The US Fed rate pause announcement appears to have revived investor confidence after enduring dovish market momentum over the past week.

Price Insights:

Bitcoin (BTC) price rebounded 9% within the daily timeframe on March 20, peaking at $67,857 after the US Fed announced a third consecutive rate pause. On-chain data trends shows that BTC whales have started buying again after a week look market pullback.

Will the ongoing recovery phase send BTC price above $75,000 before the halving ?

Bitcoin Whales have Started Buying Again

Despite higher-than-expected inflation figures last month, the US Fed announced a third-consecutive rate pause at the last FOMC meeting on March 2024. This has sparked bullish reaction across major risk assets markets including the cryptocurrency sector.

Within 24 hours of the Fed rate decision announced around 2 pm ET on March 20, BTC price races into an instant 9% rebound peaking at $68,000 within the daily timeframe. On-chain data shows that US-base whale investors have played a pivotal part in the ongoing BTC price recovery phase.

Cryptoquant’s Coinbase premium index tracks the level of buying activity among US-based institutional investor trading on Coinbase pro.

Essentially, it compares the current BTC prices on Coinbase pro against the price quoted on Binance. When Bitcoin price is trading at a premium on Coinbase, it signals that intense market demand among whales investors, and viceversa.

Bitcoin (BTC) Price Forecast: $75k Rebound Begins as Whales Flip Bullish_1

Bitcoin (BTC) Coinbase Premium Index vs. Price | Source: CryptoQuant

The chart above shows that the Coinbase Premium Index for Bitcoin surged to a 7-day peak of 0.026% on March 20. This signals that the US-based whales swung into action and started buying more BTC following the positive Fed rate announcement.

Strategic investors consider it bullish signal when whales tune up their buying activity. Firstly, it increased market liquidity and their outsized demand also of the drives up prices.

A closer look at the chart also shows that Bitcoin price has often entered a major upswing when the Coinbase premium has swung into positive values after multiple days in recess.

If this rare market trend re-occurs, bull could capitalize on the ongoing rebound phase to drive the rally towards 200%

Bitcoin Price Forecast: Bears could mount roadblock at $69,000

Bitcoin has witnessed increased whale demand since the Fed rate pause announcement, which could potentially drive BTC price toward $75,000 if sustained.

However, the current Bitcoin liquidation map compiled by Coinglass shows that the bears could mount a significant resistance at the $69,000.

Bitcoin (BTC) Price Forecast: $75k Rebound Begins as Whales Flip Bullish_2

Bitcoin (BTC) price prediction |March 2024 |Source: Coinglass

As seen above, the bears stand to lose over $1 billion in short liquidations if BTC price breaks above that $69,000. However, the flat lines after that range suggests that Bitcoin face minimal resistance if it advance above $70,000.

In the even of other market downturn, the BTC bull can count on the $65,000 support in the near-term.

Source: FX Empire

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Zi Cheng

Traders' Opinions

Economic

Private sector firms in Britain are continuing to observe growth in output, providing further evidence of a recovery from last year's recession.

According to S&P Global, the UK Composite Purchasing Managers' Index (PMI) recorded 52.9 in March, showing a marginal decline from February's 53. Although this figure fell below economists' expectations, it remained above the crucial threshold of 50, indicating growth for the fifth consecutive month.

Fifth Consecutive Month Sees Expansion in UK Business Activity, Indicating Recovery_1

These statistics are the latest indicators of moderate growth in the UK economy following a mild recession last year. However, they also highlight persistent inflationary pressures that the Bank of England aims to address by maintaining interest rates at a 16-year high.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted in a report that the robust expansion of business activity marked the economy's strongest quarter since the second quarter of last year. The PMI reading suggests that UK GDP is projected to increase by 0.25% in the first quarter.

As the latest decision approaches, economists and investors anticipate the Bank of England to retain the key rate at 5.25%. The PMI figures, which show minimal change from the previous month, indicate that the economy is progressing largely in line with the central bank's forecast issued last month.

According to S&P, manufacturing output experienced a slight increase for the first time since February 2023. However, the expansion in services activity weakened due to reduced demand from households affected by the cost-of-living crisis.

While confidence among services providers declined, optimism in the manufacturing sector reached its highest level since April 2023. Businesses anticipate higher sales throughout the year, citing improvements in consumer confidence, easing inflation, and the potential for rate cuts in 2024.

Inflation remains a major concern for businesses grappling with soaring input costs. Wage pressures have risen in the services sector, while manufacturing firms have encountered higher freight costs and commodity prices.

"Persistent inflation in the service sector has persisted into March, exacerbated by renewed inflationary pressures in manufacturing," Williamson stated. "March's PMI signals sustained underlying price pressures, likely prompting calls for caution in any move towards lower interest rates until there are clear indications of reduced wage growth."

The survey revealed that inflation concerns have dampened hiring activity, with private sector employment stagnating in March as businesses grew more cautious about hiring amid cost pressures and challenges in retaining staff.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Ukadike Micheal

Economic

Forex

In March, the UK private sector exhibited a mixed performance, with solid growth in output levels but lingering concerns about inflationary pressures and the cautious pace of employment growth. Despite some challenges, the overall outlook remained positive, supported by sustained expansion in service sector activity and a tentative return to growth in manufacturing output.

The S&P Global Flash UK PMI Composite Output Index, which serves as a key indicator of economic performance, registered 52.9 in March, reflecting a solid rate of output growth for the fifth consecutive month. This continued expansion was underpinned by increasing business activity in the service economy, although manufacturing production also saw a modest uptick, marking the end of a twelve-month period of decline. The resilience demonstrated across both sectors contributed to the overall positive momentum in the UK private sector.

However, amidst the growth, concerns regarding inflationary pressures persisted. Input prices continued to rise sharply, driven primarily by factors such as wage increases, transportation expenses, and rising commodity prices. This elevated cost environment posed challenges for businesses, leading to a surge in output charges across the private sector. While the rate of inflation may cool in the coming months, underlying price pressures remain significant, necessitating careful consideration in monetary policy decisions.

Employment growth in the private sector remained stagnant in March, with firms adopting cautious hiring strategies amid strong cost pressures, particularly in the service sector. The lack of pressure on business capacity also contributed to a reduction in unfinished work, albeit at a modest pace. These trends underscored the delicate balance between expanding business activity and managing operational costs, highlighting the need for prudent workforce management strategies.

Despite challenges, there were positive signs for future growth prospects. Total new business orders continued to increase, albeit at a slightly reduced pace, signaling ongoing demand in the market. Additionally, while total export sales saw only marginal growth, manufacturers reported a renewed upturn in total new work, suggesting a cautiously optimistic outlook for future demand.

Looking ahead, while the provisional PMI data for March provides reassurance of a solid rebound for the UK economy, there remains a need for vigilance in addressing inflationary pressures and ensuring sustainable employment growth. The continued expansion in business activity, coupled with expectations of improving global manufacturing conditions and rising consumer confidence, presents opportunities for further economic recovery. However, policymakers must navigate these challenges prudently to maintain stability and support long-term growth.

Source: S&P Global

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Ukadike Micheal

Economic

Stocks

Global stocks surged to record highs, with technology and commodity shares leading the charge in Europe, propelled by increasing trader confidence in anticipated interest rate cuts. The Stoxx 600 index soared by 0.9%, marking a significant uptick in market sentiment. Likewise, S&P 500 futures hinted at a fourth consecutive day of gains in US shares, reflecting the widespread optimism permeating the markets.

One notable contributor to this bullish sentiment was Micron Technology Inc., which witnessed an impressive 18% surge in pre-market trading. This surge was attributed to a stronger-than-expected revenue forecast and robust demand for AI hardware, further fueling investor enthusiasm.

The market's renewed optimism followed closely on the heels of the Federal Reserve's decision to maintain its projection for three rate cuts this year, despite recent upticks in price pressures. Chair Jerome Powell underscored the Fed's cautious approach, indicating a readiness to initiate easing measures later in the year while awaiting further evidence of declining prices.

Market sentiment was further bolstered by a return of focus to technology stocks, as noted by IG Australia strategist Tony Sycamore, who described the market as experiencing a "magnificent sea of green." This resurgence in tech stocks injected renewed vigor into the markets, highlighting their significance as key drivers of overall market performance.

While market optimism prevailed, attention turned to the Bank of England's impending decision, with expectations leaning towards the maintenance of interest rates at a 16-year high. This decision aimed to provide additional time for inflationary pressures to subside, underscoring central banks' commitment to maintaining economic stability.

Furthermore, futures for the S&P 500 and Nasdaq 100 witnessed notable gains, rising by 0.5% and 0.9%, respectively, following the previous day's surge, particularly in mega-cap tech stocks. This upward trajectory reflected investors' confidence in the resilience of the market and its ability to weather economic uncertainties.

Analysts at Banco Bilbao Vizcaya Argentaria emphasized the Fed's adeptness in striking a balance between price stability and maximum employment, signaling a potential policy normalization starting in June. This forecast further reinforced market confidence in the central bank's ability to navigate complex economic landscapes.

The positive momentum extended beyond Europe, with indices across Asia and emerging markets registering significant gains, underscoring the global nature of the market's optimism. This synchronized uptick underscored investors' collective belief in the resilience of the global economy and its capacity for recovery.

The surge in global stocks reflects a convergence of factors, including growing confidence in central banks' ability to navigate economic challenges, anticipation of interest rate cuts, and continued support for technology stocks. Despite lingering uncertainties, investors remain optimistic about the market's trajectory, heralding a promising outlook for the future.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Zi Cheng

Traders' Opinions

Economic

The Swiss National Bank has implemented a 25 basis point reduction in its key interest rate, taking proactive measures ahead of global counterparts amid efforts to curb appreciation of the franc.

Swiss National Bank Unexpectedly Lowers Interest Rates_1

In Zurich, policymakers have decreased their benchmark rate to 1.5%, marking the first adjustment for one of the world’s top 10 traded currencies since the easing of the pandemic. While some investors had anticipated such a move, the majority of economists had forecasted the rate to remain steady until at least June.

Following the announcement, the franc experienced a significant decline, dropping 1% against the euro to its lowest level since July 2023 and depreciating 1.2% against the dollar to reach a fresh four-month low.

The SNB's action hints at potential easing later in the year by the Federal Reserve and European Central Bank, alleviating upward pressure on the franc and reducing the necessity for interventions that could expand their already substantial balance sheets.

By taking action at this moment, Jordan and his fellow policymakers are sidestepping the possibility of waiting for similar moves by global counterparts. Unlike the Fed and ECB, the SNB's quarterly calendar comprises only half as many scheduled announcements, with its next decision in June coming after theirs.

Among Group-of-10 peers, the Swiss currency has emerged as one of the poorest performers this year due to speculation that the SNB would lead in initiating policy easing. In December, the central bank indicated the possibility of intervening in the foreign exchange market to devalue the franc.

Although the rate cut came unexpectedly, certain banks had been anticipating such a move. Concurrently, data from CFTC positioning indicate that leveraged funds, encompassing hedge funds, escalated their positions betting on a weaker franc to their highest levels in a year last week.

The SNB has consistently demonstrated its willingness to surprise investors with sudden moves, and this rate cut adds another notable event to that narrative. Past examples include the abrupt decision to remove the cap on the franc in 2015 and the unexpected 50 basis-point increase in borrowing costs in 2022.

Having battled against the strength of the safe-haven currency for years, the SNB then shifted its approach in recent years, aiming to control imported inflation.

Until the final quarter of last year, the central bank had bolstered the franc through purchasing activities. However, analysts anticipate that these interventions ceased as the franc attained a record high against the euro in late 2023.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Alex

Economic

Central Bank

The Bank of England is widely expected to keep interest rates unchanged at 5.25% on Thursday, but economists are divided on when the first cut will come.

Headline inflation slid by more than expected to an annual 3.4% in February, hitting its lowest level since September 2021, data showed Wednesday. The central bank expects the consumer price index to return to its 2% target in the second quarter, as the household energy price cap is once again lowered in April.

The larger-than-expected fall in both the headline and core figures was welcome news for policymakers ahead of this week’s interest rate decision, though the Monetary Policy Committee has so far been reluctant to offer strong guidance on the timing of its first reduction.

The U.K. economy slid into a technical recession in the final quarter of 2023 and has endured two years of stagnation, following a huge gas supply shock in the wake of Russia’s invasion of Ukraine. Berenberg Senior Economist Kallum Pickering said that the Bank will likely hope to loosen policy soon in order to support a burgeoning economic recovery.

Pickering suggested that, in light of the inflation data of Wednesday, the MPC may “give a nod to current market expectations for a first cut in June,” which it can then cement in the updated economic projections of May.

“A further dovish tweak at the March meeting would be in line with the trend in recent meetings of policymakers gradually losing their hawkish bias and turning instead towards the question of when to cut rates,” he added.

At the February meeting, two of the nine MPC decision-makers still voted to hike the main Bank rate by another 25 basis points to 5.5%, while another voted to cut by 25 basis points. Pickering suggested both hawks may opt to hold rates this week, or that one more member may favor a cut, and noted that “the early moves of dissenters have often signalled upcoming turning points” in the Bank’s rate cycles.

Berenberg expects headline annual inflation to fall to 2% in the spring and remain close to that level for the remainder of the year. It is anticipating five 25 basis point cuts from the Bank to take its main rate to 4% by the end of the year, before a further 50 basis points of cuts to 3.5% in early 2025. This would still mean interest rates would exceed inflation through at least the next two years.

“The risks to our call are tilted towards fewer cuts in 2025 – especially if the economic recovery builds a head of steam and policymakers begin to worry that strong growth could reignite wage pressures in already tight labour markets,” Pickering added.

Heading the right way, but not ‘home and dry’

A key focus for the MPC has been the U.K.’s tight labor market, which it feared risked entrenching inflationary risks in the economy.

January data published last week showed a weaker picture across all labor market metrics, with wage growth slowing, unemployment rising and vacancy numbers slipping for the 20th consecutive month.

Victoria Clarke, U.K. chief economist at Santander CIB, said that, after last week’s softer labor market figures, the inflation reading of Wednesday was a further indication that embedded risks have reduced and that inflation is on a path towards a sustainable return to target.

“Nevertheless, services inflation is largely tracking the BoE forecast since February, and remains elevated. As such, we do not expect the BoE to conclude it is ‘home and dry’, especially with April being a critical point for U.K. inflation, with the near 10% National Living Wage rise and many firms already having announced, and some implemented, their living wage-linked pay increases,” Clarke said by email.

“The BoE needs data on how broad an uplift this delivers to pay-setting, and hard information on how much is passed through to price-setting over the months that follow.”

Santander judges that the Bank could decide it has seen enough data to cut rates in June, but Clarke argued that an August trim would be “more prudent” given the “month-to-month noise” in labor market figures.

This sentiment was echoed by Moody’s Analytics on Wednesday, with Senior Economist David Muir also suggesting that the MPC will need more evidence to be satisfied that inflationary pressures are contained.

“In particular, services inflation, and wage growth, need to moderate further. We expect this necessary easing to unfold through the first half of the year, allowing a cut in interest rates to be announced in August. That said, uncertainty is high around the timing and the extent of rate cuts this year,” Muir added.

Source:CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

FastBull Featured

Remarks of Officials

On March 20, local time, European Central Bank (ECB) President Christine Lagarde said in a speech that

The potential costs of policy adjustment errors are high, and the ECB has developed for this reason a monetary policy framework constructed around the three criteria of the inflation outlook, underlying inflation dynamics, and the strength of monetary transmission, which allows for more confidence in forward-looking decisions.

At this point, unlike at the beginning of the interest rate maintenance phase, we now have several reasons to believe that the disinflationary journey will continue: for one, inflation results have been largely in line with expectations; second, inflation is expected to fall to 2% by mid-2025 (earlier than previously forecast); and in general, moreover, monetary policy transmission is proceeding efficiently, with a general slowdown in underlying inflation gauge.

However, service inflation in the eurozone remains stubborn and gained momentum in February. The eurozone inflation measure now stands at 4.5%, at the top of the range of the underlying inflation gauge. This suggests that wage growth remains strong and labor markets remain tight.

In conclusion, while significant progress has been made on the path to disinflation and in the accuracy of inflation forecasts, the persistence of domestic price pressures and uncertainty about their nature necessitate continued vigilance and a cautious adjustment of the policy stance.

Three key risks need to be closely monitored to achieve a level of confidence in the policy shift:

The first is wage growth, which is expected to slow to 3% in nominal wages over the next three years, and it would allow real wages to catch up with pre-pandemic levels by the end of the forecast period. If wages catch up with pre-pandemic levels by the end of this year, this will cause inflation to rise. Second, lower profit margins are a factor in the lack of rising inflation alongside wage growth. If enterprises regain pricing power and profit margins grow more than expected, this could lead to a reversal in inflation. Finally, worsening geopolitical risks could lead to lower productivity among European enterprises, keeping labor costs high.

However, because of the lag in policy, members cannot have all the data before they start making decisions and need to rely on forthcoming evidence to boost confidence. By June, the new forecasts will confirm whether the current inflation forecasts remain valid, as well as provide a better understanding of the path of inflation and the state of the economic recovery, also including the likely direction of the labor market.

In addition, members will continue to monitor whether inflation declines as expected, especially the pattern of declines in stubborn components such as services inflation. If economic data is in line with forecasts, the ECB could proceed with a rate cut.

The ECB's confidence in cutting rates will depend on a careful assessment of wage growth, profitability, and productivity growth, as well as an ongoing assessment of economic data to ensure it supports the inflation outlook.