- Increasing correlation between Bitcoin and the S&P 500 highlights Bitcoin’s response to U.S. economic indicators.
- Historical data suggests Bitcoin often performs well in October, with a current bullish trend signaled by the MVRV ratio.
October appears poised for a positive shift in the cryptocurrency market, especially for Bitcoin, which has demonstrated an upward trend over the past week. This analysis delves into the factors that may influence its trajectory going forward.
Bitcoin’s value has increased by about 4.4% recently, moving from just below $63,000 to approximately $66,000. This rise included a significant increase that took Bitcoin over the $65,500 mark, evidenced by a prominent green candle on hourly charts, indicating robust buying interest.
Influence of Federal Reserve’s Rate Cut
The Federal Reserve recently reduced interest rates by 50 basis points, marking the first such adjustment in over four years. Fed Chair Jerome Powell noted that future rate decisions would hinge on forthcoming economic data. This rate cut is generally seen as favorable for riskier assets like Bitcoin, prompting a brief 2% increase in Bitcoin’s price to $60,000 before it stabilized.
Correlation with Major Indices
Bitcoin’s movements increasingly mirror those of the U.S. stock market, especially the S&P 500, with a current correlation coefficient of 0.67. This suggests interplay between Bitcoin’s price movements and major U.S. economic indicators, highlighting Bitcoin’s growing role within the broader financial ecosystem.
Historically, October has been a strong month for Bitcoin, often showing gains contrary to September’s typically weaker performance. The Market Value to Realized Value (MVRV) ratio for Bitcoin is presently at 2.04, slightly over its 365-day simple moving average of 2.02. This ratio suggests that the market may maintain its positive momentum.
Here’s a closer look at three cryptos that are attracting interest and may be poised for further gains.
Bitcoin (BTC): Bitcoin’s recent performance reflects a long-term bullish sentiment, even amidst a week of neutral activity. Over the past month, the price of Bitcoin increased by more than 10%, contributing to a year-to-date gain of 51.55%. It is currently priced at $63,988.38, with a market valuation of approximately $1.26 trillion.
Technical indicators like the Relative Strength Index (RSI) on the daily chart show a bullish curve above the midpoint, and the EMA 50/200-day trend suggests a potential for further positive momentum.
If Bitcoin can break through its resistance trendline, it may be on track to set new records; however, a downturn could see it retract to around $60,000.
Binance Coin (BNB): BNB has been trading in a narrow range between $454.5 and $635 since June, indicating strong resistance at the upper boundary. This year, BNB has surged by about 86%, reflecting overall market optimism.
The EMA 50/200-day provides support on the daily chart, but the MACD indicator reveals a potential bearish shift, suggesting mixed prospects.
Should bullish sentiment prevail, BNB may challenge its key resistance level at $635 in the weeks ahead; otherwise, it may fall back to the $543 support level.
Sui (SUI): The Sui coin has shown remarkable momentum, rising 8.03% in the last 24 hours and achieving a 138.41% increase over the past month. With a current market cap of $5.22 billion, Sui ranks 20th among cryptocurrencies.
The MACD on its chart continues to display a strong green histogram, while the SMA supports the ongoing price trend, indicating sustained growth. If bullish forces maintain control, Sui could revisit its ATH of $2.1850 soon. Conversely, a bearish shift could push the price down to $1.60.
As always, due diligence and a keen eye on market indicators will be essential for navigating the volatile waters of cryptocurrency investment.
