PrimeXBT: What does the rest of the trading year have in store for Cryptocurrency?
29 Outubro 2024 - 10:02AM
NEWSBTC
PrimeXBT: What does the rest of the trading year have in store for
Cryptocurrency? By Matthew Hayward, Senior Market Analyst at
PrimeXBT Traditionally, the fourth quarter and October have been
strong months for cryptocurrencies, particularly Bitcoin. However,
this year, the gains have been less impressive than in previous
years. Currently, Bitcoin has increased by over 5% this month,
providing a glimmer of optimism. So, what has caused this
underwhelming performance, and why haven’t we seen the expected
rally? Reflecting on early October, a series of announcements and
shifts in the economic landscape contributed to Bitcoin’s initial
decline, setting a challenging tone for the month. Analysing the
infographic below shows that, during a “bull market,” the fourth
quarter has historically been a period of significant growth for
Bitcoin. With just two months left in the quarter, will Bitcoin
maintain its upward momentum? Source: Crypto Rover Current price
movements influenced by political uncertainty Several key events
demand attention from both political and economic perspectives. On
the political front, the upcoming U.S. elections are in focus, with
recent polls indicating a surge in Trump’s popularity. While the
final results remain uncertain until election day, past trends show
that Trump’s campaigns have often driven positive momentum in both
traditional and cryptocurrency markets. He has also voiced support
for advancing cryptocurrency adoption if re-elected, sparking
questions about whether this could drive broader acceptance in the
sector. Looking more closely at the infographic below, we can see
that the timing of Bitcoin cycles alongside U.S. election cycles
has generally resulted in a net positive impact on Bitcoin’s price
following elections. Source: Crypto Rover Ongoing uncertainty in
the macroeconomic landscape In September, the Federal Reserve made
a significant move by reducing interest rates by 0.5%, marking a
substantial shift after an extended period of stability. This bold
rate cut takes us back to the last major interest rate cut, where
the FED also cut interest rates by 0.5%, which took place right
before the stock market crash that triggered the 2008 financial
crisis. Source: Reuters Following the announcement of the interest
rate decision, Non-Farm Payroll data came in significantly higher
than expected, contrasting with previous reports. The Federal
Reserve had previously emphasised its intent to support the labour
market, and as the elections approach, it appears to be succeeding.
However, the question remains: how substantial will next year’s
revisions be if these results are indeed inflated? Could inflation
continue to rise in the future? In the light of the Federal
Reserve’s 0.5% interest rate reduction and unexpectedly strong job
reports, attention has turned to inflation concerns. The Fed
reiterates lowering inflation to its 2% target; however, traders
are now concerned about the potential risk of inflation increasing
following the rate cut. Recent CPI figures showed a slight uptick,
landing at 2.4%, just below the previous month’s rate of 2.5%.
Should inflation continue to rise while U.S. GDP data remains
stagnant or decreases, the economy could face the threat of
“stagflation.” Source: Reuters Could an economic downturn be
looming ahead? Historically, Bitcoin and the broader cryptocurrency
market have yet to face a prolonged period of major economic
uncertainty. Since Bitcoin’s launch in the late 2000s, it has
existed solely in the post-2008 financial crisis environment. This
brings up an important question: how might the risk of a potential
“Black Swan” event impact its price trends and disrupt established
cycle theories? Source: Seekingalpha What impact do these
developments have on cryptocurrencies and the broader markets? As
cryptocurrency adoption increases and more institutional investors
enter the market, traditional indicators are likely to have a
greater influence on trading strategies for risk assets like
cryptocurrencies. The two charts below illustrate how the markets
are anticipating these data releases and their impact on Bitcoin’s
price movements. Notably, prior to the interest rate cut, the price
of Bitcoin began to rise sharply. This is because, in an
environment of interest rate cuts, risk assets like
cryptocurrencies typically perform better. The charts demonstrate
how this positive sentiment was already reflected in the pricing,
leading to an upward movement following the announcement. In the
second scenario, we can see that the latest CPI data release was
not favourable for the pricing of risk assets, as uncertainty grew
regarding the possibility of rising inflation. If inflation were to
start increasing, the chart below illustrates how the market was
already pricing in a negative reaction to that data release. How to
Trade Key Economic and Political Events with PrimeXBT As economic
uncertainties increase, new trading opportunities may emerge.
PrimeXBT stands out as a premier cryptocurrency and CFD broker,
offering a robust trading platform for buying, selling, and storing
cryptocurrencies. The platform grants access to more than 100
popular markets, including Crypto Futures, Copy Trading, and CFDs
across Cryptocurrencies, Forex, Indices, and Commodities. Users can
trade with both fiat and cryptocurrency funds, making it a flexible
option for adapting to the changing macroeconomic environment.
PrimeXBT enables trading by lowering barriers to entry and
providing secure, user-friendly access to financial markets. The
platform provides top-tier trading conditions and innovative tools,
making it easier for both novice and seasoned traders to explore a
diverse array of investment opportunities. Trade key events with
PrimeXBT Disclaimer: The content provided here is for informational
purposes only and is not intended as personal investment advice.
Past performance is not a reliable indicator of future results. The
financial products offered by the Company are complex and come with
a high risk of losing money rapidly due to leverage. Virtual assets
are inherently volatile and subject to significant value
fluctuations, which could result in substantial gains or losses.
These products may not be suitable for all investors. Before
engaging, you should consider whether you understand how these
leveraged products work and whether you can afford the high risk of
losing your money. PrimeXBT does not accept clients from Restricted
Jurisdictions as indicated in its website.
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