(Kitco News) –Bitcoin (Bitcoin) bulls are struggling to hold support at $62,000 in early Wednesday trading after bears successfully breached the $63,000 level late on Tuesday as they push to regain lost ground on battle for control of price action.

Weakness in financial markets returned after Minneapolis Federal Reserve Bank President Neel Kashkari said the central bank is likely to keep interest rates where they are until policymakers are sure inflation is on track to rise. your goal.

“The most likely scenario is that we are going to sit here for a long period of time,” he said while speaking at the Milken Institute Global Conference on Tuesday. “If inflation starts to fall again or we [see] some sharp weakening in the labor market that could lead us to reduce interest rates.”

Kashkari also addressed the possibility of a rise in interest rates, which gave many investors a reason to pause and reevaluate their exposure to the markets.

“Or if we eventually become convinced that inflation is embedded or consolidated now at 3% and that we need to go up, we would do that if necessary,” Kashkari said.

The major indices opened lower on Tuesday following the aggressive statement, but have returned to neutral or positive territory at the time of writing.

Data provided by TradingView shows that Bitcoin hit a low of $61,755 shortly after the US market opened, but has since rebounded above $62,600.

BTC/USD Chart by TradingView

At the time of writing, BTC is trading at $62,210, down 2.6% on the 24-hour chart.

“When the price of Bitcoin fell 12% in a few days last week, even the most bullish crypto investors feared the worst. Which makes its strong recovery since hitting a two-month low on May 1 all the more remarkable,” said Neil Roarty, analyst at the investment platform. Stock Analysis.

“The price of Bitcoin is now comfortably above $60,000, helped in no small part by confirmation from the US Federal Reserve that interest rate hikes are unlikely in the near future,” he added. “But there is debate about what happens from here.”

“The most bullish options traders are targeting $100,000 by the end of this year. To reach that price, Bitcoin will have to show even greater resilience in the face of increasing regulatory scrutiny and greater political and economic uncertainty,” said Roarty. “Given the gains of recent months, many will support Bitcoin to do just that.”

Macro pressures weigh on crypto market

“The recent selling pressure appears more macroeconomic than Bitcoin-focused,” James Davies, co-founder and CPO of Crypto Valley Exchange, said in a note to Kitco Crypto. “Tech stocks fell and corporate AI performance failed to live up to expectations.”

“In the US, the DTCC haircut has reduced the expected near-term attractiveness of ETFs, reducing speculative views of additional cash inflows in the near term,” he said. “With the Fed all but ruling out a rate hike in response to overly persistent inflation, the U.S. position is bullish across the economy in the near term.”

“More distant transitions, with the Indian elections and Indonesian government changes bringing uncertainty in markets with large Bitcoin holdings, it is certainly a wait-and-see time for those with significant holdings to get a bearing on the market as a whole,” Davies noted.

Referencing open interests data provided by Deribit, Davies said options traders “appear to have significant bets that Bitcoin will rise to $80,000 by the end of May, which would be a new all-time high.”

Given the recent pullback below $60,000, “some of these may be historic bets, but there hasn’t been much coverage of their positions, so some faith remains,” he said. “Even more convincing, however, is the increasing concentration of open interest around the $100,000 level for the end of July. If the Runes have the impact that many believe they will, perhaps this psychological level could actually be within reach much sooner than many expected. Overall, options paint a similarly mixed picture, with short-term volatility the main expectation.”

As for what could help reignite bull market momentum, Davies noted that “Bitcoin has a strong base for growth, which includes the recent halving, which often tends to lead to prices appreciating over the next year and seeing the Bitcoin reaches new highs.”

Other bullish factors include “the introduction of Runas bringing more functionality to Bitcoin, including DeFi functionality, and the recent launch of spot Bitcoin ETFs in Hong Kong, perhaps with greater value for international investors than those with 100% collateral cuts.” In the USA”.

“After the recent rally, a lot of capital has been invested in good projects that will start launching during the summer, perhaps creating a second DeFi summer,” he said. “Even though this will occur more in the autumn and winter of 2024, projects that improve capital efficiency by replacing outdated metrics such as total value locked (TVL) were the subject of DAS London and Token 2049 in Dubai. There are many positive things to see in Bitcoin and the crypto ecosystem created in the last bull run.”

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes. This is not a request to carry out any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.

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