Despite a recent downturn in the global cryptocurrency market, the market capitalization stands at an impressive $2.11 trillion, showing a notable 3.21% increase over the last 24 hours, based on data from Coinmarketcap. This positive trend suggests that there may be brighter days ahead for both Bitcoin and alternative cryptocurrencies. Here are three reasons why BTC and altcoins are set to surge.
1. Lower interest rate expectations
CME Group data shows that Wall Street traders are increasingly expecting a Federal Reserve interest rate cut in September, with the probability of it reaching 72% on July 7th.
Lower interest rates typically benefit Bitcoin and other cryptocurrencies. When interest rates are low, the returns on traditional, low-risk investments such as savings accounts and government bonds decrease. This prompts investors to seek higher returns in riskier assets like Bitcoin, which have the potential to offer higher returns.
Lower interest rates often result in an increase in money supply and liquidity in the economy. With more money available, investors are more willing to invest in a wider range of assets, including riskier ones.
Additionally, they decrease the cost of borrowing. This means that people can borrow money at a cheaper rate to invest in higher-risk, higher-reward assets like Bitcoin, which can drive up the price of such assets as more capital flows into them.
2. Crypto market corrections aren’t that bad
According to several posts by observers and experts on X (formerly Twitter), the crypto market has experienced more severe corrections in recent years. One author describes the current state of the market as “the calm before the storm.”
Fidelity officially filed documents for spot ether ETFs, and VanEck and 21Shares filed for spot Solana ETFs. The current trend line was also observed in 2019, 2020, and 2023. Touching it led to an altcoin bull market in the next few weeks.
Compared to altcoins in 2020, alternative coins today show a double bottom, higher lows, and a bullish cross RSI.RSI.
3. Bullish divergence
Despite the recent drop to $55,000, Bitcoin has shown a bullish divergence, with the Relative Strength Index (RSI) rising. This indicates that the average gains in recent price movements are greater than the average losses, suggesting more buying pressure and upward momentum in the Bitcoin price.
A rising RSI often reflects bullish sentiment, implying that traders and investors are increasingly optimistic. This can lead to further price growth as more buyers enter the market. Bitcoin’s current RSI is 36, which is considered neutral.
