Following hints of potential interest rate reduction in September in Federal Reserve minutes, Bitcoin and Ethereum saw significant increases. Market players are currently anticipating the release of the US unemployment claims data as well as Fed Chair Powell’s remarks from the Jackson Hole Economic Symposium.
Popular cryptocurrencies Ethereum and Bitcoin saw a sharp increase on Thursday after Federal Reserve minutes revealed that interest rate reductions in the US could start in a few weeks.
According to the minutes, the “vast majority” of policymakers believed that a September rate decrease was likely to be appropriate if data came in as expected, supporting betting on a rate cut next month.
Bitcoin (BTC) was up 2% over the previous day as of 1:06 pm IST, trading at $60,798. At $2,631, Ethereum (ETH) saw a 1.2% increase in trading.
“A downward revision in U.S. employment growth figures, which suggests that the job market was not as strong as first reported from March 2023 to March 2024, provided additional support for the rally. This has increased market participants’ expectations that the Federal Reserve will decrease interest rates more significantly, which is something that should happen sooner, according to CoinSwitch.
“Bitcoin and other cryptocurrencies surged following the FOMC meeting minutes, which suggested a potential interest rate cut in September,” said Shivam Thakral, CEO of BuyUcoin, in the meantime. Market liquidity will be improved by lower interest rates as borrowing costs decline.
Ahead of the U.S. initial jobless claims data, which is expected at 6:00 pm IST, market players are anticipating remarks from Fed Chair Jerome Powell at the Jackson Hole Economic Symposium on Friday.
According to Giottus CEO Vikram Subburaj, “Bitcoin could potentially rally to $63,500 if today’s US jobless claims report shows a drop in claims.”
Major tokens in the cryptocurrency market as a whole enjoyed rises, with gains of up to 11% for BNB, XRP, Dogecoin, Uniswap, Polkadot, Polygon, Chainlink, and Shiba Inu.
According to data available on CoinMarketCap, the overall amount of stablecoins is currently $65.33 billion, or 92.97% of the entire 24-hour volume of the cryptocurrency market.
The largest cryptocurrency in the world, Bitcoin, had its market capitalization increase to $1.2 trillion in the past 24 hours. Currently, 56.95% of the market is made up of Bitcoin, according to CoinMarketCap. The volume of BTC increased 30% to $34.9 billion in the last day.
ZebPay Trade Desk’s technical viewpoint
Even with a 21% increase after retesting the sub-$50,000 threshold on August 5, the price of Bitcoin has found it difficult to stay above $62,000. The S&P 500 index, on the other hand, has entirely recovered and is currently trading barely 1% below its peak set on July 16. Bitcoin is facing conflicting signals: macroeconomic data point to a move away from cash positions, while derivatives measurements indicate a lack of buyer demand.
It’s interesting to note that these stock market gains coincide with a significant decline in US Treasury yields, suggesting that traditional assets are in high demand. It appears that traders are reluctant to increase their exposure to cryptocurrency assets as the Federal Reserve’s September decision approaches, which makes it difficult for Bitcoin to retake the $62,000 mark.
In the last several months, Bitcoin’s price has dropped over 25% and reached a low of $49,000, making it difficult for the cryptocurrency to stay above the $70,000 barrier. The asset, however, failed to close on a daily basis below the crucial $52,500 support level. Instead, it rebounded to $62,745 when purchasing was signaled by the lower longer shadow around $50k. With little activity, BTC is currently trading sideways between $57,500 and $62,000. The asset’s trend will be further determined by breakouts with strong volumes on either side of the range.
Bitcoin Surges Past $60,700 Amid Rate-Cut Hopes; Ethereum Also Rises as Market Awaits Key Economic Data
Following recent changes in U.S. economic policy, Bitcoin and Ethereum have seen large gains in a fundamental shift for the cryptocurrency industry. August 22, 2024, saw a spike in both Bitcoin (BTC) and Ethereum (ETH), with the former rising to $2,631 and the latter surpassing $60,700 in trading. The Federal Reserve’s hints about prospective interest rate cuts in September have sparked a surge and given investors in cryptocurrencies hope.
Fed Minutes Drive Up Cryptocurrency
The Federal Reserve’s most recent meeting minutes were leaked, and they revealed that the bank may lower interest rates as early as next month, which served as the impetus for this spike. According to the minutes, the “vast majority” of policymakers think that if the next data matches expectations, a rate decrease in September could be justified. The expectation of reduced interest rates has stoked investor excitement, propelling notable price surges for prominent cryptocurrencies.
Bitcoin’s Bullish Momentum
With a 2% price increase in the last day, Bitcoin has achieved a noteworthy feat, especially now that it is over $60,700. The 21-week exponential moving average is represented by the $61,200 level, which market watchers are actively monitoring. A break above this level would indicate that Bitcoin has reached an all-time high, which would boost the cryptocurrency’s already good perception.
According to CoinSwitch Markets Desk, “bears have started to show interest at the 21-week exponential moving average at $61.2k USD to take BTC back to early $60k USD levels as bulls are showing strength above $60k USD.” If this doesn’t occur, there’s a strong likelihood that Bitcoin will reach its all-time high shortly.”
Ethereum’s Gains
With a 1.2% rise, Ethereum—the second-largest cryptocurrency by market capitalization—traded at $2,631. This gain is indicative of the general optimism in the market, which is fueled by hopes for improved economic circumstances.
“Bitcoin and other cryptocurrencies surged following the FOMC meeting minutes, which suggested a potential interest rate cut in September,” said Shivam Thakral, CEO of BuyUcoin, in response to questions about the state of the market. Market liquidity will be improved by lower interest rates as borrowing costs decline.
Market Interest Turns to Important Economic Data
Amidst the current euphoric phase in the cryptocurrency market, investors are also anticipating crucial economic data that may have an impact on market movements. A major area of interest is the first jobless claims statistics from the United States, which will be released later today. It is also expected that Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium on Friday would shed more light on potential future monetary policy.
The CEO of Giottus, Vikram Subburaj, emphasized the possible consequences of the forthcoming report on unemployment claims: “Bitcoin could potentially rally to $63,500 if today’s US jobless claims report shows a drop in claims.”
Broader Market Trends
Beyond Bitcoin and Ethereum, a number of other significant cryptocurrencies have also experienced gains, demonstrating the upward momentum. There have been rises of up to 11% in tokens like BNB, XRP, Dogecoin, Uniswap, Polkadot, Polygon, Chainlink, and Shiba Inu. This widespread upswing highlights the increasing positivity in the bitcoin sector.
Stablecoin volume on the market now stands at $65.33 billion, or 92.97% of the 24-hour total volume of the cryptocurrency market. With a market capitalization of $1.2 trillion, Bitcoin now holds a 56.95% dominance. In the past day, there has been a 30% increase in BTC volume, reaching $34.9 billion.
Technical Evaluation and Attitude of the Market
Even with the latest upswing, Bitcoin has had trouble staying above $62,000. The asset is now trading with modest trade volumes, between $57,500 and $62,000. Technical indicators imply that the short-term trend of Bitcoin may be determined by a breakout from this range combined with substantial volume.
“Over the past few months, Bitcoin struggled to sustain above the $70k mark and experienced a correction of almost 25%,” writes ZebPay’s trade desk. But it bounced back to $62,745 after finding support at $52,500. The sideways trading that is currently occurring indicates that a significant volume breakthrough will be necessary for future price changes.”
Conclusion
The current spike in Ethereum and Bitcoin prices is indicative of a general upsurge in confidence brought on by possible policy changes from the Federal Reserve. The bitcoin market is still volatile and sensitive to changing economic circumstances as players in the market anxiously anticipate new economic data and remarks from central banks. When navigating this changing terrain, investors need to stay informed and take into account both technical signs and macroeconomic considerations.
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