On Friday (September 13), Bitcoin first surged higher, then fluctuated at the level of $58,000. Bulls held on to the integer mark tightly, preventing it from being broken. Dogecoin fell slightly after reaching $0.1032. Billionaire Elon Musk tweeted again, suggesting that he would join the U.S. government efficiency committee, and the DOGE abbreviation in his tweet gave the meme coin a boost. The Federal Reserve will release its September resolution next week, and the pricing of a 25 basis point interest rate cut has supported the buying of cryptocurrencies.
Former US President and Republican presidential candidate Donald Trump has announced that if he wins the US presidential election in November, he will appoint billionaire Musk as chairman of the government efficiency commission.
Musk, who is hailed as the "Father of Dogecoin," wrote on Thursday: "Department Of Government Efficiency."
Its abbreviation DOGE boosted buying of Dogecoin.
Last weekend, Musk wrote on Twitter: "The Department of Government Efficiency." This post attracted more than 80 million views. In the picture, you can see that Musk is sitting at the desk of DOGE, and the full English name of DOGE is Department of Government Efficiency, which is the Department of Government Efficiency of the United States Government.
According to IntoTheBlock, 70% of Dogecoin holders are currently in a profitable state, and 62% of Dogecoin is stored in the wallets of large holders. The number of transactions exceeding $100,000 per day also increased from 158 to 179.
Bezinga mentioned that on the simple moving average (SMA) chart, Dogecoin’s 200-day SMA price is $0.14, which is above the 50-day and 100-day SMA price levels. This generally means that the long-term trend of the asset is weak, and it may also indicate the end of the previous uptrend and the beginning of a potential downtrend.
The U.S. Bureau of Labor Statistics released the latest data on Thursday. The annual growth rate of the U.S. Producer Price Index (PPI) in August was 1.7%, lower than the market expectation of 1.8%, which hit a new low since February this year. The previous value was also revised down from 2.2% to 2.1%. Following the data of the Consumer Price Index (CPI), this further shows that inflation in the United States is easing.
At the same time, the number of initial jobless claims in the United States was 230,000 in the week ending September 7, slightly higher than market expectations. The previous value was revised from 227,000 to 228,000, but the overall change was not large.
Regarding this economic data, Paul Ashworth, an analyst at Capital Economics, an economic research institution, pointed out that PPI once again provides a basis for the Federal Reserve to start cutting interest rates next week. He said: "As expected, PPI increased by 0.2% month-on-month last month, while the growth rate in July was revised downward."
However, the analyst also mentioned that when analyzing these data together with Wednesday's CPI data, the possibility of the Federal Reserve cutting interest rates significantly is actually not high.
"Combining the PPI data with the CPI data, the core PCE monthly rate, which is more favored by the Fed, will rise modestly by 0.14%. The Fed is expected to cut interest rates by 25 basis points next week, and their threshold for a significant rate cut is still very high."
QCP Capital pointed out that based on the combined CPI and PPI data, the probability of the Federal Reserve cutting interest rates by 25 basis points has risen to 85%, reaching the highest level in nearly a month.
As for Bitcoin, its rebound shows that bullish sentiment is relatively dominant in the market, as investors continue to bet on call options for October and December.
However, apart from the Fed’s interest rate cut expectations and the impact of the US election, there may be no other fundamental factors that will affect Bitcoin in the near future. So before the dust settles, Bitcoin’s volatility will be reduced.
Bitcoin volatility fell 12% this week, driven by the CPI release and the presidential debate. With no major overall economic events in the near term, volatility is widely expected to be lower ahead of next week’s FOMC meeting.
Bitcoin Technical Analysis
Cryptocurrency analyst Daan Crypto Trades evaluated the current state of the Bitcoin market and also explained the historical performance trend of Bitcoin in September. Although it is generally believed that Bitcoin usually faces difficulties in September, Daan believes that after evaluation, whether at the beginning of a bullish trend, in the late stage of the previous market cycle, or in the bearish phase, September often means a local bottom, followed by an increase in the fourth quarter.
Recently, Bitcoin has experienced two relatively obvious declines, especially on August 5, when Bitcoin fell by nearly 25% and the price once dropped to US$49,000.
Then, there was another retracement on September 6, with the price falling to $52,000. However, amid these fluctuations, Bitcoin has shown its resilience and is currently trading at $58,360, which shows that the macro rising trend line has strong support.
Additionally, Daan Crypto Trades also highlighted that a significant portion of Bitcoin’s liquidity remains at elevated levels. This observation is consistent with the sharp price drop in early August that effectively cleared the historical levels of the past six months.
The analyst also highlighted key price levels to monitor, stressing the importance of breaking through the $65,000 mark. Once this level is broken, it would mean a local higher high has been formed, which could pave the way for the $70,000 liquidity target.
