The expectation of interest rate cut is "frustrated" again. Is the "smart money" waiting for BTC to hit the bottom at $62,000?

On the first day of trading on Wall Street in the second quarter, the S&P 500 and the Dow Jones Industrial Average fell after new U.S. economic data prompted investors to reduce their bets on interest rate cuts this year. The S&P closed down 0.2%, the Dow fell 0.6%, and the Nasdaq Composite rose slightly by 0.1%.

The overall crypto market is down, and Bitcoin is close to testing the key support level of $68,000. It once fell to $68,089.00 during the day. As of the closing time of the US stock market, it was still hovering below $70,000, with a 24-hour drop of 1.8%. Ethereum (ETH) fell 1.54%, falling below $3,600, XRP fell 2.36%, and ADA fell 2.63%. Coinglass data shows that in the past 24 hours, the total liquidation amount of the crypto market has caused $316 million, of which longs account for the vast majority, reaching $257 million.

Traders cut rate cut bets

The biggest data point affecting the market today is the ISM manufacturing index, which rose 2.5% to 50.3% in March, exceeding all economists' expectations. An index above 50% indicates that manufacturing managers believe that the manufacturing market is expanding.

Driven by the data, the U.S. dollar index DXY broke through 105 for the first time since November 2023, rising 0.49% on the day. The U.S. 10-year Treasury yield hit a two-week high, rising 13.1 basis points on the day to 4.325%.

The ISM reports are not government data that are incorporated into the Commerce Department’s quarterly economic growth figures. But they are closely watched by investors, who see the data as a sign that the economy is doing well and the Federal Reserve may not need to cut rates to help it despite higher interest rates in the past few years. Bond traders are currently pricing in less than a 50% chance of a rate cut in June 2024, a shock to a market that had been expecting as many as six rate cuts.

Last week, Federal Reserve Chairman Powell emphasized in his speech that the Fed hopes to lower interest rates only after it is more confident about the inflation trend, and strong labor market conditions mean there is no urgency to cut interest rates at present.

Holidays cause liquidity to drop

Well-known trader Daan Crypto Trades said that the Easter holiday may be a factor in the market pullback in recent days.

He said on the X platform: “Grayscale has not yet released any data, except for some ETH and other tokens in small quantities, which may be related to the market being closed around Easter. The usual inflows/outflows are expected to appear again starting tomorrow.”

Meanwhile, BTC/USD is currently trading at its lowest level since March 25, and Daan Crypto Trades believes that a break below the 200-period moving average on the 4-hour timeframe, currently at $67,330, is not out of the question. He said: “Price is testing the 4H/1D trend here, and it will be more of a test before price moves back above $70,000.”

Meanwhile, trading firm QCP Capital warned of increased “downward pressure” in the cryptocurrency spot market in its latest “New York Color” update to Telegram channel subscribers, saying: “Over the past 24 hours, we have seen strong interest in selling calls and buying puts on BTC and ETH.”

“Smart Money” Targets Buying Dips at $62,000

By tracking Binance exchange order book liquidity, Material Indicators charts BTC price action between now and the upcoming block subsidy halving.

In a series of X posts, Material Indicators co-founder Keith Alan said: “Despite Bitcoin’s seventh consecutive green month in history, the halving is not the ‘only upside’. Smart money has lowered the bid to add to positions to $62,000.”

Alan went on to say that Bitcoin may cause problems for institutional buyers as prices fluctuate in relatively uncharted territory, but once the halving comes and goes, people will strengthen their conviction about new all-time highs.

He commented: “At least one entity thinks this is highly likely, as their BTC accumulation target has dropped to $62K after the price briefly dipped below $69K, which among other things shows that even the institutional guys are unsure where the price will fall back to, so they are happy to DCA in this range as there is a high degree of confidence that a new ATH will occur after the halving.”

BTC to surge to $150,000 after halving

Morgan Creek Capital CEO Mark Yusko said in an interview with CNBC that although the price of Bitcoin is still below last month's all-time high, based on its historical performance, the price of Bitcoin may soar to $150,000 after the halving.

He analyzed: “The big move happens after the halving, and by the end of the year, it will start to become more... parabolic. And, historically, it’s about nine months after the halving, so sometime around Thanksgiving, Christmas, we’ll see a peak in prices before the next bear market.”

As for Morgan Creek Capital’s strategy for the bull market, Yusko revealed that they have allocated 80% of the portfolio to private equity and 20% to highly liquid tokens, with the main focus tokens including Ethereum (ETH), Solana (SOL) and Avalanche (AVAX).