Bitcoin is facing an unprecedented challenge. More than 10% below its all-time high, the world’s leading crypto is struggling to recover despite the halving in 2024. This unexpected stagnation raises multiple concerns among investors and industry experts.
Bitcoin in search of its lost momentum
Since its last halving in April 2024, Bitcoin has failed to reach a new all-time high. This is the longest cycle in crypto history without reaching a post-halving price peak. Bitcoin is currently suffering from a “lack of energy.” It seems that we are in the middle of a prolonged period of stagnation. A cycle analysis from market lows shows that the $69,000 level reached in 2021 remains a major obstacle.
This lack of momentum stands in stark contrast to traditional post-halving expectations, where a reduction in mining supply is expected to boost Bitcoin’s value. Moreover, the disconnect between expectations and reality is fueling frustration in the market.
The Impact of US Economic Policies on Bitcoin
Beyond the internal dynamics of crypto, the overall macroeconomic environment plays a major role in Bitcoin’s current trajectory. The US Federal Reserve (Fed), with its monetary policies and potential decision to cut interest rates in September, could have a significant impact. A short-term rally in Bitcoin could be triggered by a rate cut. However, this effect would be short-lived if market confidence does not improve.
While some predict that the interest rate cut could even cause Bitcoin to fall by nearly 20%, the prospect of a rapid recovery seems to be fading. The wait-and-see strategy imposed by economic uncertainty and the lack of clear direction from regulators is increasing market volatility.
In short, the combination of weak market dynamics and an unpredictable macroeconomic environment imposes a period of waiting and caution for investors. While Bitcoin’s appeal as a safe haven remains intact for some, others are beginning to doubt its ability to withstand global economic shocks without a clear direction.
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