Key information
- There are signs that a crypto market rally will happen soon.
- The Senate will consider the crypto market structure bill next week.
- The Federal Reserve will likely continue to cut interest rates this year.
The crypto market remains in a bear market, with Bitcoin 28% below its all-time high of $126,275. Nonetheless, there are some potential catalysts that will lead to a rally in cryptocurrencies, at least in the meantime.
Market Structure Bill to Spark Crypto Market Rally
The upcoming Senate vote on the market structure bill could lead to a crypto market rally. Lawmakers will soon decide its future. Senator Rick Scott, chairman of the Senate Banking Committee, announced that there would be a mark-up vote next week.
He said the bill would make it easier for companies in the crypto sector to succeed. He believes this will help them succeed in the United States. He also hopes that the bill will lead to more job creation in the country.
The CLARITY bill has already passed the House of Representatives. It will now require all Republicans and eight Democrats to pass it in the Senate. Polymarket traders believe the Senate will pass it and Donald Trump will sign it.
This law will be the second most important bill passed by Washington politicians after the GENIUS Act. It focused on the stablecoin industry.
Bitcoin price has formed an uptrend
Meanwhile, the crypto market rally will be triggered by a potential rebound in Bitcoin price as it has formed a very bullish chart pattern.
The chart below shows that the coin has formed an ascending triangle pattern. Horizontal resistance and a diagonal trend line characterize it.
This resistance lies at $94,468, while the diagonal line connects the lowest swings since November last year. Bitcoin’s recent pullback comes as bears attempt to retest the diagonal line.
Therefore, Bitcoin price is likely to rebound and exceed $100,000 in the near term. This will increase the performance of other altcoins.
Cryptocurrency Fear and Greed Index Is Rising
Market participants have moved from extreme fear to neutrality. This change is another key catalyst for a crypto rally.
Data shows that the Crypto Fear and Greed Index has moved from the extreme fear zone of 10 to the neutral point of 40. This means that the gauge will soon move to the green zone.
In most cases, cryptocurrency prices tend to rise when the gauge moves towards the greed zone. They then fall when the index moves towards the extreme greed zone.
Therefore, a move to the Greed Zone will likely result in risk sentiment among investors. This will push him higher in the long run.
Federal Reserve Interest Rate Cuts and Soaring M2 Money Supply
The crypto market rally will strengthen as the chances of Federal Reserve interest rate cuts increase. The increasing probability fuels optimism.
The chances of further cuts increased after the United States released a mixed labor market report. That report showed the economy added 55,000 jobs in December, well below the median estimate of 70,000. The unemployment rate stood at 4.4%, much higher than a year ago.
At the same time, more data showed that consumer inflation in the United States is falling and Donald Trump has not had a major impact on rising inflation. Additionally, Trump will replace Jerome Powell with a friendlier official later this year.
The Fed’s cuts will coincide with more US stimulus, including the Big Beautiful Bill and tax rebates. Some of these funds will be transferred to the crypto market.
Additionally, global money supply M2 is expected to continue to increase this year. Bitcoin and other altcoins do well when the money supply is in a strong upward trend.
Futures open interest hits all-time low. Stablecoin outflows from exchanges have also reached their lowest level. Both signals show strong market support. These signs are very optimistic for a crypto rally.
The article Crypto Market Rally: Top Reasons to Bet on a Cryptocurrency Bull Run appeared first on The Market Periodical.
