The theme of the day is interest rate cuts. In today’s update, I’ll cover what happened last Friday at the Jackson Hole meeting, where Federal Reserve Chair Jerome Powell hinted at the possibility of upcoming interest rate cuts.

I’ll also discuss how this has affected both traditional and crypto markets, and offer my insights on recent price action in the crypto space, along with where I see things heading in the next few weeks and months.

Last Friday, Jerome Powell made an announcement at the Jackson Hole Economic Symposium, signaling that interest rate cuts are likely on the horizon for the U.S. economy. This news had an immediate impact across various markets, including the crypto market. In particular, Bitcoin (BTC) saw a significant price movement following the announcement.

As always catch my full breakdown in the video below, or keep reading for my summarized analysis.

Bitcoin’s Recent Price Action

Let’s jump right into the Bitcoin chart. As many of you know, Bitcoin struggled to break above its downtrend line at the end of July. This failure led to a low point on August 5th, where Bitcoin dropped below the $50,000 level. This marked the bottom of a correction that had started back in mid-March. However, as I mentioned last week, I believe that the August 5th low was the ultimate bottom of this correction, and I do not anticipate Bitcoin falling below that level again.

Since reaching that low, Bitcoin has rebounded by more than 30%, reaching over $64,000 over the past weekend. This rally was largely fueled by the optimism surrounding Powell’s announcement of potential interest rate cuts. Before Friday, Bitcoin had been trading between $60,000 and $62,000 throughout August. However, on Friday, it surged from under $61,000 to over $64,000, breaking through the $62,000 resistance level that had been holding back the market.

Despite this surge, Bitcoin has since pulled back about 5% from its weekend highs as we entered the new week. It’s important to note that this kind of price action is typical in the crypto markets and shouldn’t be cause for concern. The move from the August 5th low to the recent high lasted about 20 days and resulted in a 32% gain—a pattern we’ve seen in previous short-term bull cycles. After such a run-up, it’s common to experience a brief period of pullbacks, and I believe that’s what we’re currently witnessing.

I expect this pullback to continue for a few more days, potentially bringing Bitcoin down to the $60,000 or $58,000 level. However, I want to emphasize that any fluctuations between now and September 18th—the date of the next Federal Open Market Committee (FOMC) meeting—are largely insignificant. I’m not planning to make any investment changes in the coming weeks because I don’t foresee any major price action before the FOMC meeting. Significant action would require Bitcoin to close below $54,000, which I don’t expect to happen.

The Anticipated FOMC Decision

As we approach September 18th, betting markets currently predict a 50 basis point rate cut, which would lower the federal funds rate from 5-5.25% to 4.5-4.75%. Such a cut is likely to have a substantial impact on most markets, especially risk assets like Bitcoin and other cryptocurrencies. Lower interest rates typically lead to more liquidity in the financial system, which could drive higher prices in the crypto market.

Given this potential development, I’m confident that September 18th could mark the beginning of Bitcoin’s move toward breaking above the critical downtrend line at around $69,000. This level is being closely watched by crypto investors and traders as a key indicator for the start of the next leg of the crypto bull market. Once Bitcoin breaks above this level, I expect a significant influx of capital into Bitcoin, Ethereum, and other altcoins.

Ethereum and the Altcoin Market

Now, let’s take a quick look at Ethereum (ETH). While Ethereum didn’t experience as strong a rally as Bitcoin did following Friday’s announcement, it has still gained about 20% from its August 5th lows, currently sitting around $2,570. Over the past few days, Ethereum has pulled back by about 8%, which is slightly more than Bitcoin’s 5% decline. However, this shouldn’t be seen as a negative signal. Most traders are focused on Bitcoin’s ability to break above its downtrend line before committing more capital to the market.

Ethereum’s price action is also indicative of the broader altcoin market, with most altcoins experiencing similar declines over the past few days. I believe that we won’t see sustained momentum in the altcoin market until Bitcoin decisively breaks above its downtrend line, which I anticipate happening within the next month or so.

Final Thoughts

In conclusion, we are approaching a critical juncture in the crypto market, with all eyes on the FOMC’s decision on September 18th. Until then, it’s important to remain patient and not get shaken out by short-term price fluctuations. The $69,000 level for Bitcoin is the key resistance that we need to break for the next leg of the bull market to begin.

If you’ve been following along, you’ll know that I’ve been predicting the start of the next bull market to occur either in late September or October, which aligns with the seasonal trends and the four-year cycle that the crypto markets tend to follow.

So, stay patient a little while longer. I believe that we’re just a few weeks away from seeing some exciting developments in the crypto market as we head into the fourth quarter of 2024.

That’s all for today’s update. Thank you for tuning in, and I’ll see you next time on Crypto Investing Daily.

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This article previously appeared on Investing Daily.