Weekly Crypto Market Wrap: Bitcoin Surges, Fed Cuts Rates, and Gold Breaks Records

London: 23 September 2024 (TraderMade): The week saw a whirlwind activity in the financial and crypto markets. Bitcoin surged past $64,000 as the Federal Reserve cut rates, and gold reached an all-time high.

In a significant moment for the cryptocurrency world, Vice President Kamala Harris spoke about digital assets, further solidifying their place in future financial policies.

Key Takeaways

• Bitcoin rallied to a monthly high of over $64,000, fueled by Fed rate cuts.
• Altcoins experienced substantial gains after the Federal Reserve's 50 bps rate cut.
• The SEC approved Nasdaq to list options on iShares Bitcoin Trust ETF, marking a milestone in derivatives trading.
• Kamala Harris voiced support for digital assets and AI innovation, signaling political shifts.
• Gold hit a new all-time high, driven by monetary easing and inflation concerns.

Bitcoin’s Rally and the Fed’s Rate Cut

This week, Bitcoin surged above $64,000, nearing its monthly peak. The Federal Reserve’s decision to cut interest rates by 50 basis points was the key driver behind the rally. The markets reacted with renewed vigor as liquidity flowed into risk assets.

Bitcoin, often dubbed "digital gold," benefited from the same scarcity narrative that fueled gold's rise to new heights. The repricing of bond returns and expectations of further rate cuts provided a tailwind to BTC's upward trajectory.

With Feds Funds Futures pricing in a 50/50 chance of another 50 bps cut, investors are eyeing further gains in both Bitcoin and gold. The technical picture for Bitcoin is bullish, having broken out of a descending wedge, with analysts targeting $65,000 next.

Kamala Harris on Digital Assets

In a significant political development, Vice President Kamala Harris made her first public comments on digital assets. Her remarks, which emphasized support for innovation in AI and cryptocurrency, have been seen as cautiously optimistic.

While her stance contrasts with former President Trump’s pro-Bitcoin approach, her acknowledgment of emerging technologies suggests a potential shift in regulatory tone.

The upcoming US elections add a layer of uncertainty to the crypto market. Harris’ comments highlight the rising awareness among policymakers regarding the significance of digital assets in the global economy.

Altcoins Surge Amid Monetary Easing

Altcoins followed Bitcoin’s lead, with several tokens experiencing double-digit gains. Ethereum, Solana, and lesser-known coins like OM and Sei saw heightened interest, particularly after the Federal Reserve’s rate cut.

Investors are flocking to altcoins as the macroeconomic environment becomes more favorable, with lower interest rates potentially leading to more liquidity in the market.

The SEC Approves Bitcoin ETF Options

In another significant breakthrough, the US Securities and Exchange Commission (SEC) approved Nasdaq’s application to list options on the iShares Bitcoin Trust ETF. This move represents a crucial milestone in the mainstream adoption of crypto derivatives.

On the institutional side, spot Bitcoin ETFs saw inflows of $92 million on Friday, underscoring the growing demand for crypto exposure.

Gold and Bitcoin: A Tale of Scarcity

Gold's remarkable performance this week, reaching a new all-time high, shares a thematic narrative with Bitcoin. Both assets benefit from a scarcity premium as inflation concerns rise and monetary policy continues to ease.

With Bitcoin's market cap still a fraction of gold's ($1.2T vs. $17.8T), some analysts predict that Bitcoin has room for massive growth over the next decade, potentially reaching $950,000 per coin.

Technicals and Macro Outlook for Bitcoin

Key technical levels to watch for Bitcoin include support at $53,000 and $55,000, while resistance looms at $66,000 and $72,000, with the ATH at $73,794. Bitcoin’s technical outlook has turned bullish after breaking through the descending wedge pattern, with solid buying momentum anticipated soon.

As we head into next week, markets will watch closely for final GDP data and the Fed’s preferred inflation gauge, the Core PCE Price Index, which could further influence Bitcoin’s trajectory.

Spotlight on Ethereum (ETH)

Ethereum's performance lagged slightly behind Bitcoin but maintained vital support levels. The ETH/BTC ratio, which hit multi-year lows, started to recover toward the end of the week. Ethereum remains short-biased against Bitcoin, but some investors are cautiously optimistic, with ETH prices finding support of around $2,100.

Longer-term, analysts believe that shorting ETH/BTC remains a strong proxy for long BTC exposure, as Ethereum faces structural hurdles in scaling and market positioning compared to Bitcoin.

Conclusion

The past week was monumental for both traditional and crypto markets. Bitcoin is riding a wave of bullish sentiment, bolstered by favorable macroeconomic factors and increasing institutional adoption.

Meanwhile, altcoins enjoy renewed interest as lower rates and liquidity injections fuel market optimism. As we head into the next week, all eyes will be on upcoming economic data and political developments, especially with Kamala Harris' evolving stance on digital assets.