Bitcoin Price Surges Above $64K: What Actions Should You Take Next?
Bitcoin price experienced a drop of nearly $1,000 in just the last hour, but it managed to stay above the $64,000 mark, indicating that the market correction is likely short-term.
This significant drop occurred shortly before the much-anticipated speech by US Federal Reserve Chairman Jerome Powell in Nashville, Tennessee.
Powell: No Need for Labor Market Cooling for 2% Inflation
In a statement on Monday, Federal Reserve Chair Jerome Powell stated that the Fed believes further cooling of labor market conditions is unnecessary to achieve the 2% inflation target. He mentioned that while many indicators suggest the labor market is strong, there have been signs of cooling over the past year.
Powell highlighted that disinflation has been widespread and recent data indicates a sustainable return to the 2% goal. He also noted that the job market is now in balance, and longer-run inflation expectations are stable.
If the US economy continues to perform as expected, the Fed’s policy is likely to move towards a more neutral stance, which could positively impact Bitcoin price.
Powell’s comments on broad-based disinflation and economic stability may boost investor confidence in Bitcoin, as a more neutral Fed policy could increase demand for alternative assets amid a positive outlook for inflation.
Bitcoin Soars Amid Fed Pivot and China Stimulus
The recent surge in Bitcoin price started two weeks ago after the US Federal Reserve unexpectedly cut interest rates by 50 basis points, the first cut since the beginning of the Covid pandemic. This larger-than-expected rate cut was a significant factor in the recent rally.
Another catalyst for the surge came from China, where reports indicated that authorities were considering injecting up to 1 trillion yuan into the country’s largest state-owned banks to stabilize the struggling economy.
Global markets responded positively to these developments, with China’s Shanghai Composite index jumping over 8%, European markets rising about 1%, and US stocks showing gains. These economic developments have boosted confidence in traditional and crypto markets.
Additionally, the Hang Seng Index at the Hong Kong Stock Exchange has been performing well, with the best week since 2011. This positive momentum reflects growing investor confidence in the region.
Gold prices plummeted, the US-based spot Bitcoin ETFs saw increased interest, and China’s central bank made significant rate cuts, all contributing to market optimism and potential Bitcoin price gains.
“Uptober” and Rate Cut Hopes Fuel Bitcoin Bullishness
The upcoming release of US job data is anticipated to impact the market, especially following the moderation of US PCE inflation to 2.2%. This has raised expectations for a more dovish Fed stance in upcoming meetings.
October historically tends to be a favorable month for Bitcoin and other cryptocurrencies, particularly with the upcoming US elections that typically bring increased volatility to financial markets.
Speculation about a potential 50 basis point rate cut in November and expectations of a strong Q4 rally are factors that could sustain bullish sentiment in the crypto market.
Investors are closely watching market indicators and upcoming economic data, as changes in Federal Reserve monetary policy could significantly influence Bitcoin price and market volatility.
Disclaimer: The opinions expressed in this content are the author’s own and are subject to market conditions. It is important to conduct thorough research before investing in cryptocurrencies. The author and publication do not bear responsibility for any personal financial losses incurred.
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Teuta
Teuta is a seasoned writer and editor with over 15 years of experience in various industries. Her fintech involvement began in 2014, focusing on crypto, blockchain, NFTs, and Web3. Known for her teamwork and communication skills, Teuta holds a double MA in Political Science and Law and enjoys punk rock, chablis, and shoes.
Disclaimer: The content may include the author’s personal opinion and is subject to market conditions. Conduct your research before investing in cryptocurrencies, and the author or publication is not liable for any financial losses.
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