The Danish central bank Nationalbanken has slashed its interest rate by 25 Basis Points (0.25%) to catch up with its counterpart, the European Central Bank (ECB), further creating room for Bitcoin (BTC) price to break out.
The Denmark Central Bank Rationale
Cutting interest rates might have different underlying reasons for different central banks but primarily, slowing inflation is the consensus basis. In the case of Nationalbanken, the move to cut the rate by 0.25% bringing it to a 3.35% peg stems from the need to keep the Krone floated as close to the Euro as possible.
Central Banks in the G7 bloc are on a concerted mission to lower interest rates. This, as projected is aimed at pushing new frontiers for the economy featuring both the traditional markets and for Bitcoin with extension to altcoins. Over the course of this week, the Bank of Canada has slashed its interest rate by 25 basis points as well.
Earlier today, the European Central Bank made the same move, leaving the United States Federal Reserve, the Bank of England and the Bank of Japan to unveil their own rate cuts. With risk assets like Bitcoin and some stocks poised to benefit from this lowered rates, the outlook for financial markets are worth considering carefully.
Though the Federal Reserve has always maintained a certain level of autonomy in its monetary policies, rate cut conversations has lingered for so long. Till today, many analysts and banks have continued to speculate on whether the Feds will step down interest rate this year.
With the impact of the Denmark cut still fresh in the market, its impact appears to be fading rather fast.
Bitcoin Price and Rangebound Breakout
Amid the monetary decisions from the worlds’ biggest central banks taking shape, Bitcoin has largely remain unfazed by this trend. At the moment, the coin is changing hands for $70,716.72, up by 0.75% in the past 24 hours.
For the week, the price of Bitcoin has not changed so drastically. Despite crossing flipping the $70,000 price level as support, this point served as a resistance point for sometime, a trend that might lend credence to the potential impact of the rate cut announcements thus far.
While Bitcoin has other catalysts that can help revive its growth toward its All-Time High (ATH), the macroeconomic considerations cannot be ruled out at the moment in push for a mega BTC breakout.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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