[TL; DR]
The recent Fed rate cuts triggered bullish momentum for both stocks and cryptocurrencies.
Gold, bitcoin and S&P500 have been bullish since the Fed September meeting.
Based on the current trend Bitcoin is targeting $70,000.
Introduction
During the fourth week of September most cryptocurrencies and stocks performed impressively following a string of positive economic developments. For instance, the United States’ 50 basis points rate cut triggered the crypto market wide rallies. That was followed by China’s economic stimulus package and interest rates cut. This analysis focuses on bitcoin’s current price trajectory.
Bitcoin's Bullish Trajectory: Price Analysis
Bitcoin has been rallying since the beginning of the fourth week of September. Its most recent rally started on the 19th of the month when its price rose above $63,000. Several positive economic developments led to its price resurgence indicating that investing in bitcoin might be profitable. First, the Federal Reserve’s interest rates cut created much optimism in the crypto market which resulted in a market-wide rally. Additionally, the United States has promised to have further Fed Funds rate cuts during the remainder of the year if inflation continues to slow down. China’s economic stimulus package and interest rates cut further helped to create a positive crypto investor sentiment.
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Bitcoin was not the only investment asset that has been rallying during the past few days. Other cryptocurrencies including SOL, ADA and BNB gained much within that period. In addition, the prices of gold and various equities that include S&P 500 have risen by significant margins. As a result, some of the equities are trading close to their all-time highs. At the moment bitcoin price target is $70,000 after it has broken above the $63,000; $64,000 and $65,000 psychological resistance levels. Currently, investors can buy bitcoin at $65, 850 after its value has risen by 9.4% within the last two weeks.
Generally, bitcoin traders are very happy about its current price movement and believe that crypto investment may remain profitable in the short to medium term. This is because anticipation is high that the bitcoin price may continue to rise as we go towards the end of this year. Based on the BTC price analysis, Byzantine General, a renowned trader and a social media commentator, said that the current trend shows much bullish momentum which may sustain the market for a long time.
Read also: Is the Bitcoin cycle theory dead? Crypto Spot Market Up – x.com/Byzantinegeneral
Another crypto trader, entrepreneur and observer, Michaël van de Poppe, also feels that the market is strong and may continue to rally for some time. He said, “I assume we'll consolidate before we continue to go up, but essentially, since Powell has been speaking, markets are going up. Nothing more.” The analyst has also advised investors to buy the dip if the chance arises. Buy the Dip Best Crypto Investment Strategy Now – x.com/Michaelvandepoppe
Despite bitcoin’s recent rally it faced much resistance at the $64,000 level, which was the post-Fed BTC price target. The recent BTC market trend has forced the bitcoin bulls to shift their investment focus, at least within the short term. According to Ki Young Ju, founder of CryptoQuant, an onchain analytics platform, institutional investors have slowed down on shorting bitcoin. In an X post Ki Young Ju said, “Institutions are no longer aggressively shorting Bitcoin.” This development comes amid mixed capital inflows into spot bitcoin ETFs.
Equities Performance Amid Bitcoin Price Resurgence
The rise in the bitcoin price and some equities within the same period shows the stock market impact on crypto. As hinted earlier on, some equities have recorded new highs during the last two weeks, a time frame in which bitcoin gained by 9.6%. JPMorgan has analyzed the performance of gold and S&P500 since the September Fed Meeting. It stated: “The S&P 500 has now hit all-time highs 39, 40, 41 and 42. It is now up 2.3% since the September Fed meeting.”
It continued, “Chinese equities (CSI 300) hit a four-year high, gaining 10.4% at Thursday’s close thanks to a flurry of Chinese policy announcements. As a result, a handful of global equities linked to China’s outlook rallied.
“Gold continued to shine making multiple highs on the week, hovering around $2,674 per ounce, while copper had its best day since 2022 on Tuesday, up almost 7% through Thursday.” These details show that the leading investment assets that include gold, stocks like S&P500 and bitcoin have been bullish within the same period after responding to the same macroeconomic factors such as the United States rate cuts.
Bitcoin Market in Correlation with US Stocks
Generally, several US stocks record highs during this period. For example, during the 24-hour period that stretched between 25 and 26 September, S&P500 rose by 0.4% to close the session at a record high. On the other hand, both Nasdaq and the Dow Jones Industrial Average gained by 0.6% to close at record highs as well. The values of Micron (MU) and the iShares Semiconductor ETF (SOXX) increased by 15% and 3.6%, respectively. Basically, the U.S shares have been performing remarkably after the September Fed meeting.
No doubt, the macroeconomic factors that are driving equities are also influencing the crypto market dynamics. At the moment the 40-day correlation between the 100 largest digital assets and S&P500 stands at 0.72%. The positive U.S economic data is one of the major contributing factors to the current market performance.
The participation of large investment institutions in the crypto sector is contributing to the correlation between crypto price movements and the equity market performance. For instance, Coinbase which is a publicly-listed company is also offering crypto trading services. It means that its share price is being affected by the performance of the crypto market. There are also several other publicly listed companies such as MicroStrategy Inc., Marathon Digital Holdings, Coinbase, and Square Inc. which have bitcoin on their balance sheets. This also means that the performance of bitcoin will also influence their share price movements. In addition, this indicates that the traditional and crypto markets now share a similar investor profile. Other firms are also investing in spot crypto ETFs.
How BTC Market Movements Impact on Investors
The cryptocurrency market is known for its volatility. However, many traders and investors capitalize on these market price fluctuations to make profits. Crypto investment requires the investors to be alert at all times. For example, they should keep abreast of events that are taking place which may affect the prices of the various crypto assets. As such, they may need to read news items, crypto updates as well as political and regulatory changes.
Due to bitcoin’s high volatility the investors should adopt proper investment strategies. As an example, they should use suitable risk management strategies that include stop loss and take profit orders. They may also need to use proper position sizes as well as diversifying their crypto portfolios. When the bitcoin price volatility is very high, the investors should take profit regularly to avert losses.
Conclusion
After bitcoin has surpassed $65,000 it is now targeting $70,000 which is a few thousand dollars below its all-time-high attained in March this year. However, it may have some corrections along the way. During the past weeks bitcoin and various equities performed remarkably. Currently, some stocks are trading close to their ATHs. As a result of bitcoin’s high volatility investors should use proper risk management strategies like regularly taking profit and utilize stop loss and take profit orders.