Bitcoin’s Price Performance Overview
The Bitcoin (BTC) price is expected to conclude Monday with losses nearing 3%. This downturn comes as the cryptocurrency market prepares to close the month on an unfavorable note, primarily influenced by less dovish than anticipated remarks from US Federal Reserve Chairman Jerome Powell and rising uncertainties surrounding Japan’s newly appointed Prime Minister.
Impact of Fed’s Commentary
In his recent speech, Powell expressed a preference for gradually cutting interest rates at 25 basis points (bps) intervals. The Federal Reserve had recently made a significant move by lowering interest rates by 50bps earlier this month—the first reduction since 2020—and indicated plans to continue lowering rates over the upcoming year to stabilize the cooling economy.
Last week, there were rising hopes in the market that the Fed might consider another 50bps cut in November. However, Powell’s statements were perceived as disappointing, causing market reactions to wane.
Bitcoin’s Market Reaction
Bitcoin’s price, which was trading almost in line with its 200-day moving average (DMA), experienced additional pressure on Monday, partly due to the announcement regarding Japan’s incoming Prime Minister, Ishiba. It is believed that Ishiba supports policy normalization but has also shown immediate backing for loose monetary policies.
It’s essential to note that despite Ishiba’s position, he has no control over the Bank of Japan’s (BoJ) policies and may not remain in office for long, especially since he has called for an election.
Bitcoin’s Recent Performance and Correction
In the wake of a strong rally that saw Bitcoin rise to as high as $66,000 last week, the current price settled in the upper $63,700s, reflecting a decline of over 4% from its recent peaks. This movement may signify a mini correction for Bitcoin as the month comes to a close.
Outlook for October: Potential Bitcoin Rally
Despite the recent setbacks, Bitcoin is on track to end the month with an overall gain of 8%, which is particularly notable given that September is traditionally a bearish month for Bitcoin prices. Historically, October has proven to be one of Bitcoin’s strongest months, often referred to as “Uptober.”
According to data from bitcoinmonthlyreturn.com, the average return for Bitcoin in September is approximately -4.4%, contrasted with a robust average return of 27% in October. However, some analysts express concern that uncertainties concerning the upcoming US elections may deter bullish investors from driving prices higher.
Factors Influencing Bitcoin’s Future Price Movement
As Bitcoin’s market prepares for the October surge, various factors could contribute to the upward momentum. Easing monetary policies from the Federal Reserve and other global central banks, along with the eventual benefits of the post-Bitcoin halving effects, could provide significant support for BTC prices. Additionally, the resolution of US election uncertainties could further encourage bullish sentiment.
One variable that could affect this optimistic narrative is the state of the US economy. Continued economic weakness might revive recession fears, leading to increased market risk. This week, key economic indicators such as the US ISM PMI activity data and the September jobs report will be released, and their outcomes will be scrutinized closely.
If the data reflects strength, it could bolster risk appetite and set a positive trajectory for “Uptober,” potentially paving the way for Bitcoin to test the $70,000 mark in the near future.