Bitcoin and gold surge on safe-haven demand: Stock market volatility and rate cut expectations spark market risk aversionBitcoin (BTC) and gold prices saw an upward trend in early trading on Wednesday, fueled by recent stock market volatility, uncertainty over the rate cut outlook, and ongoing geopolitical tensions. Traders opted for safe-haven strategies to safeguard their assets, leading to increased demand for haven assets
Bitcoin and gold surge on safe-haven demand: Stock market volatility and rate cut expectations spark market risk aversion
Bitcoin (BTC) and gold prices saw an upward trend in early trading on Wednesday, fueled by recent stock market volatility, uncertainty over the rate cut outlook, and ongoing geopolitical tensions. Traders opted for safe-haven strategies to safeguard their assets, leading to increased demand for haven assets.
David Morrison, senior market analyst at TradeNation, noted that US stocks declined on Tuesday, with the Dow Jones and S&P 500 pulling back from record closing highs reached on Monday. He said that with limited economic data releases coming out, investors will be focusing on earnings. Additionally, the prospect of a Fed rate cut will be a key focus for markets.
Morrison also pointed out concerns over the market's reaction to the Fed's hefty 50 basis point rate cut last month. Some investors believed that the Fed overreacted to a string of disappointing economic data that came out in the summer, particularly related to the labor market. However, recently released data showed that the US economy is holding up well, and the dip in non-farm payrolls could be transitory.
Morrison expects the Fed to cut rates by another 50 basis points before the year ends. He believes that the bull case for stocks remains compelling as long as the election outcome is swift and clean. However, he also acknowledged that investors may have to lower their rate cut expectations as 2025 approaches.
While traders continue to adjust their equity investment strategies, optimism about the next phase of the crypto bull market pushed the cryptocurrency market capitalization back above $2.3 trillion. Alex Kupcsikevich, senior market analyst at FxPro, said that the cryptocurrency market cap rose by 1.4% to reach $2.31 trillion. He noted that while cryptocurrencies and stocks are currently out of sync, they are still showing an overall upward trend.
Kupcsikevich also pointed out that a rising trend is forming in the cryptocurrency market, which would be further confirmed if the local high surpasses the previous all-time high of $2.32 trillion. Bitcoin experienced wild swings on Tuesday, climbing by 4% to nearly $68,000 in four hours before shedding more than 4.6% in the subsequent hours. He said that the market quickly rebounded after digesting a considerable number of stop-loss orders and is currently trading near $66,800. Kupcsikevich believes that bulls and bears will continue to battle in the retest of the $68,000 level which will be interesting to watch.
Kupcsikevich also noted that Bitcoin failed to break its resistance in July, but now the bulls have broken above the downtrend channel and are actively pulling back from the 200-day moving average. Additionally, the RSI on the daily timeframe has not yet entered overbought territory, leaving room for further upside.
Data from TradingView shows that bulls and bears are locked in a battle at the $68,000 support/resistance level. The four-hour chart shows that the bears have so far prevented the bulls from breaking through to higher highs. However, with sentiment on the rise, many experienced crypto traders believe that Bitcoin and the broader cryptocurrency market have already begun to surge after the Bitcoin halving, and most analysts expect Bitcoin to break its all-time high only a matter of time.
TradingShot, an analyst at TradingView, said that a series of signs have emerged in recent months, indicating that October marks the beginning of a strong rally for Bitcoin (BTCUSD). He noted that both the 2023 and 2024 fractals initially traded within a triangle pattern that bottomed with an inverse head and shoulders (IH&S). The bottom coincided with a 1D death cross formation, and the pattern was supported by the 1WMA50.
Based on the October 2024 fractal, TradingShot noted that Bitcoin is currently at a critical point where it is breaking above the top of the triangle (lower high trendline). He highlighted that in 2023, Bitcoin triggered a strong rally after breaking above this level, and the "breakout" occurred only after reaching the 2.0 Fibonacci extension, just after forming a 1D golden cross.
TradingShot predicts that December could see Bitcoin prices reach $88,000 (Fib 2.0ext) before the market "cools off" again. He emphasized that this will depend heavily on how the market digests the US elections in November.
As of now, Bitcoin is trading at $67,680, up 3.25% on the 24-hour chart. Spot gold is currently trading at $2673.40 an ounce, up 0.43% on the day, after hitting an intraday high of $2685.75.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
