Bitcoin shows signs of relief amid emergency rate cut calls, technical indicators

• Economist Jeremy Siegel is calling for emergency rate cuts following the recent market crash.
• Veteran trader Peter Brandt compared the recent Bitcoin sell-off to the 2015-2017 bull market cycle, when prices halved.
• Data from Arkam Intelligence shows that large investors held onto their Bitcoin holdings during the recent sell-off.
• Supply chain data suggests short-term investors are panic-selling assets during the market downturn.

The price of Bitcoin (BTC) rebounded above $55.00 on Tuesday after a sharp decline since late July. Economist Jeremy Siegel has called for an emergency interest rate cut following the recent market crash. At the same time, data from Arkham Intelligence shows that large investors such as BlackRock, MicroStrategy, Grayscale, and Fidelity have held onto their Bitcoin holdings during the sell-off. Additionally, on-chain data shows that short-term investors are panic-selling, pointing to a possible small recovery before the downtrend resumes.

Daily Market Drivers Digest: Bitcoin Holds At $50K As Jeremy Siegel Calls For Emergency Rate Cuts

• Jeremy Siegel, a finance professor and chief economist, called for an emergency 75 basis point cut in the federal funds rate in response to the recent market downturn, emphasizing the need for immediate action and suggesting an additional cut next month to better align with the Federal Reserve’s inflation and employment targets, while criticizing the Fed’s slow response as a serious policy mistake that could worsen the negative market reaction.

“I’m calling for an emergency 75 basis point cut in the federal funds rate, with another 75 basis point cut planned for next month at the September meeting – and that’s the minimum,” says Wharton’s Jeremy Siegel.

• With the likelihood of a 50 basis point rate cut in September rising to 98.5%, and some advocating for an “emergency rate cut” before the meeting (though such mid-meeting cuts are rare), a rate cut in September could potentially revive the crypto market after its recent slump.

• On Monday, veteran trader Peter Brandt posted on social media site X that the recent Bitcoin sell-off was similar to the 2015-2017 halving bull market cycle.
• Brandt said: “Note that the decline in $BTC after the halving is now similar to the decline during the 2015-2017 Halving Bull market cycle.”
• According to Brandt, the price of Bitcoin fell 27% from $650 at the close of the halving week in 2016 to a low of $474 before soaring to $20,000 in December 2017. Likewise, the recent drop to $49,050 represents a 26% drop from the post-halving price of $64,962.
• However, slowing economic activity in the US and rising tensions between Israel and Iran could push Bitcoin’s price down further before it rises.

• Arkham Intelligence data shows that during Monday’s market sell-off, major institutional investors such as BlackRock, MicroStrategy, Grayscale and Fidelity decided to hold onto their Bitcoin holdings, indicating strong confidence in the cryptocurrency’s future.

• The Spent Output Age Bands USD indicator by CryptoQuant tracks the value of spent outputs based on their creation time, providing insight into the behavior of long-term and short-term holders and their relationship to price movements.
• In the case of Bitcoin, the spent output by age range shows that most of the activity on the network was in coins less than a week old, with over $5.2 billion being moved in one hour from coins less than a week old. This spending pattern included about $850 million in realized losses, of which only $600,000 was from long-term holders, with the majority coming from short-term investors. The large volume of coins held for less than three months suggests that the price drop is causing new investors to capitulate.

Bitcoin Exit Age Range Chart in USD

Technical Analysis: BTC Likely to Show Slight Gains Before Resuming Downtrend

Bitcoin’s price broke an uptrend (drawn by combining several swing lows from July 5) on Friday, resulting in an 11.6% decline over the next three days, and tested daily support around $49,917 on Monday. However, as of this writing on Tuesday, it is making a modest recovery, trading 3.5% higher at $55,892.

In this scenario, BTC could see a dead cat bounce — a short-term price rally amid a broader downtrend — potentially encountering resistance at the 61.8% Fibonacci retracement level of $62,066 (drawn from the July 29 swing high of $70,079 to Monday’s low of $49,101). This level coincides with a broken trendline and the 100-day exponential moving average (EMA) at around $65,596, making it a critical reversal zone.

Failure to break above $62,066 could trigger a 19% plunge, leading to a retest of the daily support level at $49,917.

The Relative Strength Index (RSI) indicator on the daily chart is around 32, just above the oversold threshold. This suggests the possibility of a temporary rally before the downtrend resumes.

BTC/USDT Daily Chart

However, a close above the August 2 high of $65,596 would change the market structure, creating a higher high on the daily time frame. Such a scenario could lead to a 6% rally in Bitcoin to retest its weekly resistance at $69,648.