Bernstein Analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia provided insights into when Bitcoin price could turn bullish again and hit modern highs. The analysts also mentioned the impact that former US President Donald Trump could have an impact on Bitcoin’s trajectory.
When will bitcoin price become bullish again
Bernstein analysts mentioned in an Aug. 5 research note that they expect bitcoin and the broader cryptocurrency market to rebound if stock markets rebound on the back of the reaction Federal ReserveThey expect this answer to come in the form of interest rate cut and injecting more liquidity into the economy.
Analysts mentioned that this time, the recent cryptocurrency market crash was not Bitcoin’s fault, but was largely due to “stock market concerns” and other macroeconomic factors. The US stock market is currently facing a massive decline amid fears that the US economy could enter a recession.
Due to this historical correlation along with these actions, Bitcoin also experienced a wave of massive sell-offs that began over the weekend. This caused the flagship crypto fall below $50,000 for the first time since February of this year. The broader cryptocurrency market followed suit as altcoins experienced massive price declines.
Chhugani, Sapra, and Chindalia predict that the macro side will continue to influence Bitcoin and the cryptocurrency market for most of this third quarter. speculations that the Fed may cut interest rates next FOMC meeting in September, which will undoubtedly be beneficial for risk assets, including cryptocurrencies.
Interestingly, market experts such as the eminent economist Jeremy Siegel, called for an emergency rate cut on top of a projected rate cut that could come in September. But it remains to be seen whether the Fed will give in to such pressure, especially since it does not seem convinced that the U.S. is close to a recession.
The US election is another factor that these analysts believe will impact BTC and the broader cryptocurrency market. They said Bitcoin “remains a ‘Trump trade,’” and expect the crypto asset to continue to be range-bound until after the election. Bitcoin is expected to respond positively if Trump ultimately wins, as he is considered more crypto-friendly than the Democratic presidential candidate. Kamala Harris.
BTC prospects remain bullish
Despite the recent decline, these Bernstein Analysts remain bullish on Bitcoin in the long term, noting that there are no “incremental negatives for crypto at the moment.” They referenced the trend of institutional adoption of BTC by Spot Bitcoin ETFwhich provides an positive outlook as more and more institutional investors continue to adopt the flagship cryptocurrency.
These analysts expect more “wirehouse approvals into Q3 and Q4, providing further opportunities for asset allocation to Bitcoin.” Powerhouse Morgan Stanley has supposedly informed its financial advisors that as of August 7, they will be able to offer Bitcoin-based ETFs to their high-net-worth clients.
Featured image from PCMag, chart from TradingView.com
