Bitcoin (BTC) has experienced a decline of over 4% within the last 24 hours, dropping below the $60,000 mark. Nonetheless, there remains a potential for a retest of $74,000 in the upcoming weeks, supported by a developing Wyckoff reaccumulation pattern and the growing likelihood of three rate cuts by the end of 2024.
**Bitcoin Testing Vital Spring Support**
The Wyckoff reaccumulation pattern serves as a technical framework that highlights phases of consolidation and accumulation following an extended upward trend. This pattern typically encompasses nine essential phases: Preliminary Supply (PSY), Buying Climax (BC), Automatic Reaction (AR), Secondary Test (ST), Spring, Test, Last Point of Support (LPS), and ultimately, the Sign of Strength (SOS).
**Illustration of the Wyckoff Re-accumulation Pattern**
As of August 4, Bitcoin has entered the “Test” phase of its Wyckoff reaccumulation pattern. During this stage, the cryptocurrency is assessing its Spring phase low—approximately $53,400—as support to validate a bullish trajectory towards its next Last Point of Support (LPS) near $70,000, according to independent analyst Moustache’s chart shared on his X channel.
**Bitcoin’s Wyckoff Re-accumulation Pattern Illustration. Source: Moustache**
Per the Wyckoff reaccumulation guidelines, a new bullish cycle is expected to commence when Bitcoin reaches the ninth and final stage, known as the Sign of Strength (SOS), after retesting the peak level of around $74,000 indicated in the Wyckoff pattern. This concluding phase signifies robust upward momentum and market strength, confirming the onset of an uptrend.
**Three Rate Cuts Anticipated in 2024 amid Recession Fears**
Since August 1, Bitcoin’s value has plummeted by 10%, mirroring the downturn in the US stock market, following reports of unemployment claims reaching a near one-year high alongside dwindling manufacturing activity. Additionally, Bitcoin exchange-traded funds (ETFs) have seen withdrawals amounting to approximately $200 million during this period.
**BTC/USD Compared to Nasdaq 100, S&P 500, and Dow Jones Daily Performance Chart. Source: TradingView**
Interestingly, BTC’s drop occurs despite a rising probability of three rate cuts in 2024, contrasting sharply with the previous year’s trend where weak economic data typically benefitted crypto markets. This decline seems to be influenced by escalating recession warnings following the latest US employment report.
Historically, Bitcoin has faced challenges during times of heightened recession concerns. For instance, during the market crash in March 2020 triggered by COVID-19, Bitcoin’s value fell alongside the US stock market, only beginning to recover once the Federal Reserve enacted quantitative easing and rate cuts.
**Source: X**
Numerous analysts in the crypto space, including Michael van de Poppe, predict a similar pricing trajectory in the near future. In essence, Bitcoin may encounter recession-related risks but is likely to rebound following the Federal Reserve’s anticipated rate cuts in September.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers are encouraged to conduct their own research before making any choices.