Last week, Bitcoin showed moderate growth, trading in the range from $62,357 to $66,498. By the end of the week, the first cryptocurrency had risen in price by 3.96%, reaching $66,080, while Ethereum (ETH) added 4.42%, rising to $2,695. The week began with a slight decline in the Bitcoin rate amid low volatility, but an upward trend has already emerged since Tuesday. The key factor that determined the market dynamics in the outgoing week was the results of the September meeting of the US Federal Reserve (September 18), at which a decision was made to reduce the key rate by 50 basis points. Moreover, the regulator outlined plans to further reduce the rate to 3.4% per annum by 2025. This news contributed to the weakening of the US dollar and increased risk appetite among investors, which had a positive effect on the value of crypto assets.
Last week, the situation on the crypto market was mostly positive, especially against the backdrop of growth in altcoins. During the week, there was also a correlation between the movement of Bitcoin and the dynamics of stock indices, especially the S&P 500, which updated its historical maximum. Positive economic data from the United States, including GDP growth of 3% in the second quarter and a decrease in the number of applications for unemployment benefits, also supported the growth of the crypto market. The actions of the US Federal Reserve after the last meeting are regarded by market participants as positive for risk, and in anticipation of easing monetary policy (MP), investors are starting to take more risks, including buying less liquid crypto assets. Another important aspect that supported the crypto market was the decision of the Central Bank of China on a wide package of monetary stimulus measures to improve the economy. Liquidity inflows to the local market have indirectly supported the cryptocurrency market, making risk-on the most optimal strategy.
On Sunday, September 29, Bitcoin (BTC) is trading around $65.8 thousand, its price has grown by about 4.5% over the week. Well-known crypto analyst Konstantinas Sizovas analyzes the situation on the market and assesses the prospects for Bitcoin exchange rate movement over the next seven days.
Since the beginning of the month, the Bitcoin exchange rate has grown by more than 12%. Since the beginning of the year, Bitcoin has risen in price by 56.5%, which was facilitated by the inflow of funds into spot Bitcoin ETFs. The current situation is in sharp contrast to the traditional trend for September, when the exchange rate fell by an average of 5.9%. The market landscape has changed: Bitcoin now correlates with assets in traditional markets and with the monetary policy of the US Federal Reserve. Also, although historically the rally after halvings should have already begun, the update of the historical maximum before the halving in 2024 has somewhat disrupted the usual rhythm. Nevertheless, compared to the previous two halvings, the price is moving well so far.
According to our estimates, from a technical analysis point of view, Bitcoin is approaching the upper boundary of the long-term channel at $69,300. The flat, which has lasted 198 days from the peak of $73,777 on March 14, 2024, is creating tension in the market. Investors are closely monitoring a possible breakout of this level, since an unsuccessful attempt to exit the corridor can lead to profit taking and a sharp drop in price.
The coming week will be characterized by a large amount of fundamental data, and the most noticeable will be data on the US labor market. The rise in unemployment over the past year is causing concern for the US Federal Reserve, and the regulator is taking measures to ease the monetary policy, including to stabilize the situation in the labor market. If the market cools further, this may prompt the Fed to further soften the monetary policy, which will certainly play into the market for risky assets. At the same time, too strong an increase in unemployment and a fall in employment may become a dangerous factor in terms of recession risks, and in this case, risky assets, on the contrary, may experience pressure. Forecasts show analysts’ expectations for unemployment at 4.2%, and growth above 4.3% will be a negative factor for cryptocurrencies at the moment, but it is unlikely to have a global impact on the BTC and ETH rates.
In the coming week, investors’ attention will also be focused on the speech of Fed Chairman Jerome Powell on Monday, as well as on the publication of a number of important economic indicators, including data on the US labor market and the ISM business activity index. In addition, preliminary inflation data in Germany and the eurozone is expected to be released, which may have an additional impact on the euro rate and, indirectly, on the cryptocurrency market. The cryptocurrency community is also eagerly awaiting the conclusion of the US presidential elections, hoping that the new White House administration will establish clear rules for regulating cryptocurrencies, which could provide additional support to the market.
