Key Points
- Bitcoin surpasses $64,000: The cryptocurrency rises above $64,300, driven by expectations of global monetary easing.
- China joins global monetary easing: China unexpectedly signals monetary easing to combat its slowing economy, influencing global markets.
- U.S. consumer confidence drops: The Conference Board’s consumer confidence index reports a sharp decline, pushing markets toward risk-on assets like Bitcoin.
- M2 Money Supply increases in the U.S.: The significant rise in U.S. M2 money supply further propels Bitcoin’s upward trend.
- Gold also benefits: Gold prices hit an all-time high, rising 1.4% to $2,690 per ounce alongside Bitcoin’s growth.
- Analyst insights: Will Clemente suggests that a break above $65,000 could signal a stronger bullish market for Bitcoin.
Bitcoin Surges Past $64,000 Amid Global Monetary Easing
In the wake of growing expectations for monetary easing across major global economies, Bitcoin surged past $64,000, reaching levels not seen since early August. On September 24, 2024, during U.S. trading hours, Bitcoin aimed to break the $65,000 threshold, a key resistance level that, if surpassed, could signal a more pronounced bullish trend.
China Joins Global Monetary Easing
In a surprising move, China joined the global wave of monetary easing policies as it struggles with a slowing economy. This decision aligns China with other major global economies that have implemented easing policies to stimulate economic growth. While this announcement sent China’s Shanghai Composite Index up by more than 4%, its impact on Bitcoin was more short-lived. However, the overall trend toward easing monetary policies globally continues to fuel positive sentiment in the cryptocurrency markets.
U.S. Consumer Confidence Takes a Hit
On the same day, the Conference Board released its September report showing a sharp drop in the U.S. consumer confidence index, which fell from 105.6 in the previous month to 98.7. This marked the largest monthly decline since August 2021. Dana Peterson, an economist at the Conference Board, highlighted growing pessimism regarding the current business environment and labor market conditions, with consumers also feeling less optimistic about future business prospects and income levels.
Despite the downturn in consumer confidence, Bitcoin’s price dipped below $63,000 earlier in the day but quickly recovered after the release of this data. The sharp decline in consumer confidence, combined with ongoing global uncertainty, seems to have driven investors towards safe-haven and risk-on assets like Bitcoin.
Fed Rate Cut Expectations Increase
Following the release of the consumer confidence data, CME’s FedWatch tool reported that the likelihood of the Federal Reserve cutting benchmark interest rates by 50 basis points at its November meeting jumped from 50% to 61%. This heightened expectation of further rate cuts in the U.S. added fuel to Bitcoin’s upward trajectory as investors anticipate more liquidity entering the market.
U.S. M2 Money Supply Growth
Adding to the bullish case for Bitcoin, newly released data indicated a significant increase in the U.S. M2 money supply in August. This expansion of the money supply, coupled with China’s easing measures, helped drive Bitcoin higher throughout the day. The growth in money supply reflects ongoing stimulus efforts and liquidity injections, which are historically favorable conditions for cryptocurrencies.
Gold Hits Record High
In a parallel move, gold also benefited from these macroeconomic developments. The precious metal rose by 1.4%, reaching a new all-time high of $2,690 per ounce. Investors typically flock to both gold and Bitcoin during times of economic uncertainty, as both are seen as hedges against inflation and currency devaluation.
Analyst Commentary: Will Clemente’s Market Insights
While Bitcoin’s rise above $64,000 was met with optimism, prominent cryptocurrency analyst Will Clemente cautioned that a breakout past $65,000 is necessary to confirm a new bullish trend. He noted that Bitcoin has struggled to maintain significant gains during its recent trading range and that investors may find it psychologically difficult to switch from a mindset of profit-taking during sideways markets to holding onto profitable positions.
According to Clemente, a break above $65,000 would signal a market structure shift that could lead to increased risk-on sentiment among investors. He emphasized the psychological barrier of holding onto positions during a market breakout and suggested that surpassing $65,000 would act as a key threshold for a sustained rally in Bitcoin.
Cautious Optimism Amid Macro Uncertainty
The surge in Bitcoin’s price, alongside growing expectations of monetary easing across major economies, reflects cautious optimism in the markets. While Bitcoin’s rise past $64,000 is a positive indicator, the true test of a sustained bullish trend lies in its ability to break the $65,000 resistance level. With global economic uncertainties, such as China’s easing measures, falling U.S. consumer confidence, and increased money supply, fueling demand for risk-on assets, Bitcoin could be poised for further gains if these macroeconomic trends persist. However, as analysts like Will Clemente caution, investors should remain vigilant and watch for key technical breakouts to confirm a broader market shift.
