According to Greenspan, the forthcoming FED cut comes as a result of pressure received from the United States President and the necessity of lowering interest rates in order to regulate the economy.
Greenspan’s analysis showing the correlation between Bitcoin price and recent FED cuts indicated that whenever a FED cut is implemented, there is a corresponding exponential increase in the price of Bitcoin.
According to Greenspan, the correlation is quite simple and straightforward. A cut in interest rates ultimately encourages big business owners to borrow funds used to invest in businesses which in turn affects the larger population, increasing the rate of flow and availability of money.
Much availability of money within the larger population allows more money to be diverted to other smaller-scale investments like buying cryptocurrencies of which bitcoin happens to be the choice up to 90% of the times. When the law of demands and supply sets in, more demands on the bitcoin would ultimately raise the price and this Greenspan thinks is most definitely going to be the case after the FED cut.
Going by historical data, bitcoin had always surged up following FED cuts then experience a corresponding price crash during the next time of economic recession and repeats the same pattern when the next interest cut is made. In fact, the asset had moved up by more than 2000% by December 2017 following the FED cut that took place earlier in the year.
Analysis from earlier years ranging between 2014 to 2018 also show similar price relationships and seems to be a reasonable take at this time make an accurate inference along with such conclusions.
Apart from Greenspan’s analysis, another visible catalyst for a possible price surge in BTC is widely believed to most likely be the forthcoming mining reward halving coming up around May of 2020.
Just Greenspan’s technical analysis on FED cuts, BTC also show repeated price movements with reward halving over the years. Halving mostly always means lower circulation and higher demands which drive bitcoin’s price up to the charts.
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Staff writer at Coingape. Certified cryptocurrency expert and Blockchain journalist covering crypto market analysis and general Blockchain adoption and development.
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