Will Bitcoin Price Go Up Amid Fed Rate Cuts and Growing Demand?

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Bitcoin’s recent drop from $102,760 to $92,500, sparked by stronger-than-expected U.S. job market data, has bloodstained the crypto market. The data signaled economic resilience, pressuring both equities and cryptocurrencies. Yet, amidst the fluctuations, Jamie Coutts, Real Vision’s chief digital assets analyst, sees a brighter horizon for Bitcoin, forecasting a significant price surge over the next six months.

With the strong dollar becoming a real problem, I expected Bitcoin to be in the $80,000 range by now. This speaks to the strength of the underlying bid and the market's expectations that the Fed will have to act; otherwise, things will start breaking.

Regardless of the… pic.twitter.com/uVYYbpRv2o

— Jamie Coutts CMT (@Jamie1Coutts) January 7, 2025

Fed Moves Could Fuel Bitcoin’s Rally

Coutts argues that the Federal Reserve is likely to cut interest rates soon, injecting much-needed liquidity into the financial system. This, he believes, will provide a strong tailwind for Bitcoin’s price. Backing his outlook with historical data, Coutts highlights a strong correlation between the global money supply (M2) and Bitcoin. As M2 expands, Bitcoin has historically followed suit, making the current environment ripe for a potential rally.

“Despite the strong dollar keeping Bitcoin below $80,000, the underlying demand remains robust,” Coutts explains. He suggests that market participants are already anticipating the Fed’s next moves, which could set the stage for Bitcoin to climb higher.

Wealthy Investors Eye Bitcoin’s Long-Term Potential

Another factor fueling optimism is the growing interest in Bitcoin among high-net-worth individuals and families. These investors, unlike the daily traders, fixated on short-term liquidity fluctuations, are focusing on Bitcoin’s long-term value proposition. Coutts believes this shift in adoption will play a crucial role in sustaining Bitcoin’s upward momentum.

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Market Outlook: Short-Term Hurdles, Long-Term Gains

Currently trading at $94,592, Bitcoin has seen a 2.4% dip over the past day. Analysts expect the cryptocurrency to consolidate between $92,000 and $90,000 in the short term, with a potential rally in February. However, a daily close below $90,000 could trigger a steeper correction, possibly to $78,000–$74,000.

If #Bitcoin $BTC falls below $92,000, a drop to the $78,000–$74,000 range could be on the horizon. https://t.co/B6bPCfLNjy

— Ali (@ali_charts) January 8, 2025

Despite these challenges, Coutts remains confident in Bitcoin’s resilience. With increasing liquidity, broader adoption, and innovative developments in the crypto space, Bitcoin could be gearing up for a pivotal upswing in the months ahead. For investors, the coming period may be one of opportunity and transformation.