Traders on Tuesday pushed up the odds that the Federal Reserve would cut interest rates by 50 basis points for a second time in a row to 61%.
- Overnight, China joined what is now a near-global monetary easing movement among major economies.
- Bitcoin has surpassed the $65,000 mark for the first time since early August.
- One analyst says that a break above the $65,000 level may be necessary to confirm a bull move.
Bitcoin (BTC) prices hit a more than one-month high during afternoon U.S. trading on Tuesday as tailwinds from a looming global monetary easing cycle continue to push cryptocurrency markets higher .
At press time, Bitcoin is up nearly 2% over the past 24 hours at $64,300. The price has not been above $65,000 since the first week of August.
Overnight, China joined nearly every other major global economy in easing monetary policy to combat a slowing economy. The news sent the Shanghai Composite Index up more than 4%, but bitcoin prices only saw a brief, small gain.
Prices fell below $63,000 in early U.S. trading after the Conference Board reported a sharp drop in consumer confidence in September, with its headline index falling from 105.6 to 98.7, the biggest monthly drop since August 2021. “Consumers’ assessments of current business conditions turned negative, while views on current labor market conditions softened further,” said Dana Peterson of the Conference Board. “Consumers also became more pessimistic about future labor market conditions and less optimistic about future business conditions and future incomes.”
However, the news led to market expectations that the Fed will cut its benchmark interest rate by another 50 basis points at its November meeting, rising to 61% from 50% the day before, according to CME FedWatch data .
Shortly after, the latest data showed that the U.S. M2 money supply increased significantly in August . Loose monetary policy and increasing money supply in China and the United States appear to be the catalyst for Bitcoin's continued rise in afternoon trading. Gold also benefited from the news, rising 1.4% to hit another record high of $2,690 per ounce.
With today’s gains, Bitcoin is now up more than 10% from where it was a week ago, but it’s hard to argue that an upside breakout has occurred if prices remain below where they were a few weeks ago.
“It is psychologically very difficult to go from looking to trim gains during volatility to letting winners continue to rise,” wrote Will Clemente, a closely followed analyst . “A confirmed change in BTC market structure above $65,000 is, in my opinion, the threshold for risk appetite and a shift in this bias.”
