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What Lower Interest Rates Mean for Crypto Investors

Published

4 weeks ago

June 6, 2024

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The European Central Bank (ECB) and the Bank of Canada (BoC) have cut interest rates, marking a pivotal shift in monetary policy.

The ECB reduced its key rate to 3.75% from 4%, a move anticipated by markets despite ongoing inflationary pressures in the eurozone. Meanwhile, the BoC lowered its key policy rate to 4.75% from 5%, becoming the first G7 nation to do so in the current cycle.

ECB, BoC Slash Interest Rates

The ECB’s decision, influenced by an updated inflation outlook, reflects the need to moderate monetary policy after a period of steady rates. The ECB’s latest projections show a slight increase in inflation expectations for 2024 and 2025, with 2026 remaining stable at 1.9%.

“Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady,” Christine Lagarde, President of the ECB, said in a statement.

This cut is the first since September 2019 and follows a series of hikes that began later than other central banks but now places the ECB ahead in reducing rates.

On the other hand, the BoC’s rate cut aims to ease the burden on highly indebted consumers. Governor Tiff Macklem emphasized that future cuts would depend on continued downward inflation trends.

“Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour,” the BoC Governing Council said in a statement.

These rate cuts have several implications for the crypto market. Lower interest rates typically reduce borrowing costs, encouraging both consumer spending and business investment. This increased liquidity can boost investments in higher-yielding assets, including cryptocurrencies. Additionally, lower returns on traditional savings can drive investors toward riskier assets like crypto.

Furthermore, the rate cuts might lead to higher prices for crypto. With safer investments offering lower returns, investors often seek higher returns in the crypto market. This shift can increase demand for digital assets, potentially driving up their value.

However, the moves by the ECB and BoC come with caution. Both institutions indicate that future cuts will be data-dependent, highlighting a cautious approach amid uncertain economic conditions. Economists suggest that the ECB may wait until September for another cut, while the BoC might move again in July.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

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Exploring Upward Momentum and Bullish Prospects

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39 mins ago

July 3, 2024

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Aayush Jindal, a luminary in the world of financial markets, whose expertise spans over 15 illustrious years in the realms of Forex and cryptocurrency trading. Renowned for his unparalleled proficiency in providing technical analysis, Aayush is a trusted advisor and senior market expert to investors worldwide, guiding them through the intricate landscapes of modern finance with his keen insights and astute chart analysis.

From a young age, Aayush exhibited a natural aptitude for deciphering complex systems and unraveling patterns. Fueled by an insatiable curiosity for understanding market dynamics, he embarked on a journey that would lead him to become one of the foremost authorities in the fields of Forex and crypto trading. With a meticulous eye for detail and an unwavering commitment to excellence, Aayush honed his craft over the years, mastering the art of technical analysis and chart interpretation.
As a software engineer, Aayush harnesses the power of technology to optimize trading strategies and develop innovative solutions for navigating the volatile waters of financial markets. His background in software engineering has equipped him with a unique skill set, enabling him to leverage cutting-edge tools and algorithms to gain a competitive edge in an ever-evolving landscape.

In addition to his roles in finance and technology, Aayush serves as the director of a prestigious IT company, where he spearheads initiatives aimed at driving digital innovation and transformation. Under his visionary leadership, the company has flourished, cementing its position as a leader in the tech industry and paving the way for groundbreaking advancements in software development and IT solutions.

Despite his demanding professional commitments, Aayush is a firm believer in the importance of work-life balance. An avid traveler and adventurer, he finds solace in exploring new destinations, immersing himself in different cultures, and forging lasting memories along the way. Whether he’s trekking through the Himalayas, diving in the azure waters of the Maldives, or experiencing the vibrant energy of bustling metropolises, Aayush embraces every opportunity to broaden his horizons and create unforgettable experiences.

Aayush’s journey to success is marked by a relentless pursuit of excellence and a steadfast commitment to continuous learning and growth. His academic achievements are a testament to his dedication and passion for excellence, having completed his software engineering with honors and excelling in every department.

At his core, Aayush is driven by a profound passion for analyzing markets and uncovering profitable opportunities amidst volatility. Whether he’s poring over price charts, identifying key support and resistance levels, or providing insightful analysis to his clients and followers, Aayush’s unwavering dedication to his craft sets him apart as a true industry leader and a beacon of inspiration to aspiring traders around the globe.

In a world where uncertainty reigns supreme, Aayush Jindal stands as a guiding light, illuminating the path to financial success with his unparalleled expertise, unwavering integrity, and boundless enthusiasm for the markets.

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Should Investors See This as a Buying Chance?

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2 hours ago

July 3, 2024

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Market

Ethereum Reverses Course: Can ETH Bulls Save The Day?

Published

3 hours ago

July 3, 2024

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Ethereum price failed to climb above the $3,520 zone and corrected gains. ETH is now showing bearish signs below the $3,400 support zone.

Ethereum started a downside correction after it failed to surpass the $3,520 zone.
The price is trading below $3,400 and the 100-hourly Simple Moving Average.
There is a key bearish trend line forming with resistance near $3,410 on the hourly chart of ETH/USD (data feed via Kraken).
The pair is now at risk of more downsides below the $3,350 support zone.

Ethereum Price Dips Again

Ethereum price failed to continue higher above the $3,520 and $3,550 resistance levels. ETH formed a top near $3,520 and started a fresh decline like Bitcoin. There was a move below the $3,450 and $3,420 support levels.

The bears pushed the price below the 50% Fib retracement level of the upward wave from the $3,351 swing low to the $3,516 high. It seems like the price trimmed most gains and might continue to move down below the $3,350 support zone.

Ethereum is trading below $3,400 and the 100-hourly Simple Moving Average. It is also below the 76.4% Fib retracement level of the upward wave from the $3,351 swing low to the $3,516 high.

If there is a recovery wave, the price might face resistance near the $3,400 level. There is also a key bearish trend line forming with resistance near $3,410 on the hourly chart of ETH/USD. The first major resistance is near the $3,435 level.

The next major hurdle is near the $3,465 level. A close above the $3,465 level might send Ether toward the $3,520 resistance. The next key resistance is near $3,550. An upside break above the $3,550 resistance might send the price higher. Any more gains could send Ether toward the $3,650 resistance zone.

More Losses In ETH?

If Ethereum fails to clear the $3,410 resistance, it could continue to move down. Initial support on the downside is near $3,365. The first major support sits near the $3,350 zone.

A clear move below the $3,350 support might push the price toward $3,250. Any more losses might send the price toward the $3,120 level in the near term.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 50 zone.

Major Support Level – $3,350

Major Resistance Level – $3,435

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