Bitcoin Surges Amid Positive Economic Data
Bitcoin (BTC) kicked off the week with a strong surge on Monday morning, moving from around $62,000 to $64,000, adding to its gains from the weekend to sit 5% up since Friday. The rally was fueled by a better-than-expected US unemployment report, which reinforced hopes for a robust year-end rally.
The US unemployment rate fell to 4.05% in September, beating analysts' expectations of 4.2%, Reuters reported. This positive economic data boosted investor sentiment and sent Bitcoin's price soaring. As of press time, BTC stood at $65,580.
"This positive economic data strengthens the outlook for a robust year-end rally," said Valentin Fournier, lead analyst at BRN.
While ETF inflows remained sluggish on Friday after three consecutive days of net outflows, the recent price gains may encourage institutional investors to step in more aggressively. A new wave of inflows could further fuel Bitcoin's upward momentum, Fournier added.
Investors are also closely watching key inflation data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), which are due out later this week. While it may be too soon to see the effects of interest rate cuts reflected in these numbers, any signs of a decline in US inflation could have a positive impact on the market.
Recent rate cuts by the Federal Reserve have helped to stimulate the economy and boost investor confidence. Lower interest rates make borrowing cheaper for businesses and consumers, which can lead to increased spending and economic growth. This, in turn, can be positive for Bitcoin, as a stronger economy often leads to increased demand for risk assets like cryptocurrencies.
Analysts believe that Bitcoin's upward trend is likely to continue, with the potential to test the upper boundary of its trend at $68,000. While there may be some resistance between $65,000 and $67,000, Fournier expects Bitcoin to eventually break through.
"We expect the combination of easy monetary policy, strong risk-on sentiment, and a rebound in Trump’s winning odds to present a strong Q4 for crypto prices in general. While the journey will likely be choppy, we are encouraged by the recent price action which has seen higher lows on each subsequent sell-off, and will remain patient to wait for new highs on BTC before the end of the year," Augustine Fan, head of insights, SOFA.org, told Blockhead.
"Q4 is traditionally a bullish period for BTC and there are a number of catalysts that could see history rhyme," said NYDIG's research head Greg Cipolaro, who added that he upcoming US election on November 5 will play a big part in market performance for Q4, with larger gains to come if Trump wins.