What to do now that Bitcoin price is above $64,000 again?

The correction in the cryptocurrency market is likely only short-term, as Bitcoin price has fallen by nearly $1,000 in the past hour alone, despite staying above the $64,000 price mark.

The relatively large decline came ahead of Federal Reserve Chairman Jerome Powell's most anticipated speech in Nashville, Tennessee.

Chairman Powell: No need to cool the labor market for 2% inflation

Federal Reserve Chairman Jerome Powell said on Monday that the Fed does not believe it is necessary to further cool labor market conditions to reach its 2% inflation target. “Many indicators point to a strong labor market,” he said, adding that the labor market has shown signs of cooling over the past year.

“Disinflation is widespread,” Powell said, adding that the latest numbers suggest a return to the currently elusive 2% target may be sustainable. He went on to say that general economic conditions are appropriate for further disinflation, adding that the job market is “currently roughly balanced” and long-term inflation expectations are “firmly stable.” Ta.

He added that if the U.S. economy develops “broadly as expected” and remains strong, Fed policy will move toward a “more neutral stance.” This will likely cause the price of Bitcoin to rise again.

Powell's comments that disinflation could be widespread and the economy could stabilize as the Fed becomes more neutral and demand for alternative assets rises on the back of a favorable inflation outlook are a sign that investors are This will further increase confidence in the coin price.

Bitcoin soars amid Fed pivot and Chinese stimulus

The recent rise in Bitcoin prices comes after the US Federal Reserve made an unexpected policy shift two weeks ago, cutting interest rates by 50 basis points, the first rate cut since the coronavirus pandemic began. It has begun. This was clearly a bigger pullback than expected, as the forecast was only 25 basis points.

But the more immediate catalyst for last week's surge in both bitcoin prices and global markets came courtesy of China. According to reports, Chinese authorities are considering injecting up to 1 trillion yuan into the country's largest state-owned bank in a bid to stabilize the currently sluggish economy.

However, China's Shanghai Composite Index rose significantly, rising more than 8%, its best week since 2011. European markets rose about 1%. U.S. stocks rose but fell below previous highs. This wave of global economic development will further increase confidence in traditional and crypto markets.

Similarly, the Hang Seng Index on the Hong Kong Stock Exchange has continued to rise impressively since trading on December 17th, and has repeatedly recorded favorable trading, including today.
In particular, the Chinese stock market over the past week has seen its best performance since 2008.

So far, the Hang Seng Index is up 18% from its close on September 16th and has risen about 15% since the end of August, reflecting growing investor confidence and favorable market conditions in the region. are.

China's actions cause Bitcoin price to soar, gold to plummet

Another big casualty of recent developments has been the collapse in precious metals, with gold falling from a record high of over $2,700 an ounce and silver falling from a 12-year high.

Interest in a U.S.-based spot Bitcoin ETF is at its peak as Bitcoin prices rise again after losing momentum recently. For example, BlackRock's iShares Bitcoin Trust (IBIT) recently recorded huge inflows, attracting about $185 million in new investments, Pharcyde Investors said.

Don't forget that China's central bank recently took the big move to lower its one-year policy loan rate by the largest amount ever in an effort to boost confidence in the world's second-largest economy. This significant rate cut could boost investor confidence and global market liquidity, potentially spurring increased demand and pushing up the price of Bitcoin as an alternative asset amid economic uncertainty. be.

Earlier, the People's Bank of China announced that it would cut medium-term lending rates by 30 basis points from 2.3% to 2%, the most significant reduction since the People's Bank of China introduced financial products that guide market interest rates. It will be. 2016. This comprehensive program is being proactively taken to inject vitality into the economy and improve growth no matter what happens.

Markets are on high alert ahead of the release of US employment statistics, and the virtual currency market is no exception. The report is scheduled to be released by the Labor Department on October 4th and will include September employment figures in the non-farm sector, unemployment rate and hourly wage statistics. These signals are important in assessing the health of the labor market and are closely monitored by the Federal Reserve when determining monetary policy.

All of this could lead to increased volatility in the cryptocurrency market, with traders weighing in on possible changes in the Federal Reserve's monetary policy, the outcome of which could impact Bitcoin prices. I'm guessing.

“Uptober” and interest rate cut expectations accelerate Bitcoin bullishness

Wall Street economists expect nonfarm payrolls to rise by 144,000 jobs, up from 142,000 in the previous month, but expect the unemployment rate to remain unchanged at 4.2%. These become even more important given last week's data showing that US PCE inflation has eased to 2.2%. That raised expectations that the Fed would take a more dovish stance for the rest of the meeting, helping determine market trends.

Historical data shows that October is a very friendly month for Bitcoin prices and the prices of other major cryptocurrencies. This sentiment is further heightened by the US election, which is scheduled to normally bring further volatility and opportunity to financial markets.

Regardless, speculation of a possible 50 basis point rate cut in November has resurfaced following the recent cooling in US PCE inflation data, according to the CME FedWatch tool. This could be an ongoing policy that could help keep the crypto market bullish. Analysts are predicting more than just an “uptober,” as they are also predicting strong gains in the fourth quarter, meaning the digital asset could see further movement in the remaining months. I am doing it.