By Chris Hollingworth 
Bitcoin may be poised to stage a recovery above the key $90,000 psychological mark as concerns over monetary inflation in the United States ease. Despite a recent downtrend lasting over two months, there is optimism that Bitcoin’s bull cycle may not be over, contrary to the traditional four-year market cycle theory.
Markus Thielen, the CEO of 10x Research, believes that Bitcoin could see a counter-trend rally due to oversold conditions and a potentially dovish stance from the Federal Reserve. While not a major bullish signal, Thielen suggests that Bitcoin may consolidate within a broader range and possibly trade back towards $90,000.
Investor confidence is also receiving a boost from Federal Reserve Chair Jerome Powell’s remarks indicating a cautious approach amid rising uncertainties. Powell’s skepticism about the sustained inflationary impact of certain policies has provided some reassurance to market participants.
The upcoming Federal Open Market Committee (FOMC) meeting is eagerly anticipated by traders and investors as it could provide insights into the Fed’s monetary policy for the remainder of the year. Any decisions regarding the quantitative easing program could influence investor appetite for risk assets like Bitcoin.
Iliya Kalchev, a dispatch analyst at Nexo digital asset investment platform, highlights the significance of the Fed’s upcoming decisions, suggesting that a dovish stance from Chair Powell could fuel bullish momentum for Bitcoin. However, concerns about inflation or tight financial conditions could act as limiting factors for Bitcoin’s upside potential.
Market indicators currently show a high probability of the Fed maintaining interest rates, but recent surveys indicate a significant reduction in exposure to US equities among investors. This shift in sentiment has raised concerns about potential recession fears impacting Bitcoin’s price dynamics.
Overall, market participants are closely monitoring developments in monetary policy and economic indicators for cues on Bitcoin’s future trajectory amidst evolving market conditions.
