The price of Bitcoin (BTC) has surged toward a one-month high during U.S. afternoon trading on Tuesday, buoyed by a global trend of monetary easing. At press time, Bitcoin was up nearly 2% over the past 24 hours, trading at around $64,300. This marks a notable increase as it hasn’t exceeded $65,000 since the first week of August.
Impact of China’s Monetary Easing
China recently joined other major economies in easing its monetary policy to address economic slowdowns, leading to a more than 4% rise in the Shanghai Composite Index. While this news provided a brief uplift in Bitcoin’s price, it ultimately dipped below $63,000 earlier in the day. The decline was influenced by a sharp drop in U.S. consumer confidence, with the Conference Board reporting its headline index falling from 105.6 to 98.7—marking the steepest monthly decline since August 2021. Dana Peterson, from the Conference Board, noted that consumers’ outlook on business and labor conditions worsened, contributing to the bearish sentiment.
Federal Reserve Expectations Shift
The disappointing consumer confidence report shifted market expectations regarding U.S. monetary policy. The likelihood of the Federal Reserve cutting its benchmark interest rate by 50 basis points in November rose to 61%, up from 50% the previous day, according to CME FedWatch. Shortly thereafter, figures showed a significant increase in the U.S. M2 money supply for August, reinforcing the favorable conditions for Bitcoin.
Market Reaction and Analyst Insights
These developments led to a sustained rise in Bitcoin’s price during the afternoon trading session. Gold also reacted positively, climbing 1.4% to reach a record high of $2,690 per ounce. Currently, Bitcoin is over 10% higher than its levels from a week ago; however, analysts caution that it remains below the breakout level from just a few weeks ago.
Will Clemente, a well-known market analyst, commented on the psychological challenges of transitioning from a conservative trading approach to a more aggressive strategy. He stated that a confirmed change in market structure, with Bitcoin surpassing the $65,000 threshold, is crucial for signaling a shift towards a more bullish outlook.
While Bitcoin is experiencing a notable rally amid favorable monetary conditions, the ongoing economic indicators and market sentiments indicate a cautious approach among traders. The potential for a breakout above $65,000 remains a critical point for confirming a stronger bullish trend in the cryptocurrency market.
Related Topics:
