Key facts:
The US presidential election is positioned as a key factor for the market.
October could be a positive month for Bitcoin, according to history.
With the US interest rate cut for the first time in more than four years, markets have a new driver. This monetary policy lowers the cost of borrowing, increases liquidity and lowers Treasury bond yields. As a result, more capital could flow into assets like bitcoin (BTC).
The big question here is how will the price of bitcoin the remainder of 2024 with this new scenario. This is why various specialists have expressed their opinion on the matter.
“Bitcoin is likely to maintain an upward trend in the short term, driven by the expectation of new rate cuts and a favorable macroeconomic environment for this type of asset,” says Tania Lea, director for Latam at Azteco, a platform that allows purchases and payments in BTC.
Through a note sent to CriptoNoticias, the directive explains that the reduction of interest rates tends to stimulate investment in higher risk assetssuch as cryptocurrencies. This is due, he says, to the fact that investors are looking for higher returns in an environment of lower returns in traditional markets.
In fact, he notes that this context has already been reflected in BTC’s rise to $64,000 (USD) after the cut, as seen below.
In turn, it deepens that the political scenario in the United States, as The possible re-election of Donald Trump as president could add additional upward pressure on the price of bitcoin.The reason behind this is that the Republican’s policies are seen as pro-market and seek to boost the adoption of crypto assets.
By the end of the year, “if current macroeconomic conditions persist, we could see a considerable increase, possibly exceeding 10%,” Azteco’s management says of bitcoin.
In tune, Rodrigo Duran, director of communications of the cryptoasset exchange, Cryptomkt, visualizes an optimistic scenario“The Federal Reserve’s recent decision to cut interest rates has created a favorable environment for price increases in the cryptocurrency market, and bitcoin has been no exception,” he says.
“In general, when rates fall, investors tend to look for alternatives that offer higher returns, and cryptocurrencies, with their dynamism, attract a lot of interest in that regard,” Duran adds, through a message sent to CriptoNoticias.
October has historically been positive for bitcoin
“I expect we will see a new all-time high price in October,” comment On the other hand, analyst Michaël van de Poppe said that the currency is currently trading 13% below its record high of USD 73,700 six months ago.
Autumn in the northern hemisphere, which begins on September 21, is usually a season in which markets rise.due to the reactivation of economic activities after the holidays. That is why October has historically been a positive month for stocks and bitcoin, which augurs well with the rate cut.
However, van de Poppe does not rule out price corrections before an October rally. Based on technical analysis, he argues that $66,000 could act as the next resistance for Bitcoin. (maximum area) and USD 57,000 as support, strong levels of the corrective lateral stage that has been going on for six months, as seen below.
Bitcoin could continue to trade sideways as economics become clearer
Although the rate cut has led to bullish expectations, some predict that these will materialize in the medium term. According to Sebastián Serrano, CEO of the Ripio exchange, Bitcoin will remain in the lateral rangewhich has been going on for six months, until the end of the year.
Serrano expects the US presidential election in November to boost the market for next year. He also foresees this situation as rate cuts continue, giving a boost to the economy. The next decisions on this matter are on November 7 and December 18.
Donald Trump said the rate cut from 5.5% to 5.0% showed that the economy was in very bad shape. “It was a big cut,” he added, which he believes represents signs of economic weakness. Therefore, High volatility could be seen with more clarity on this situation.