(Kitco News) – Financial markets opened Monday facing some downward pressure but managed to overcome the noise and climb higher in the afternoon despite ongoing concerns related to the number of interest rate cuts in 2024.
The ongoing tech-fueled rally in stocks has prompted some analysts to revise their 2024 targets for the S&P 500, with the index hitting a new record high near 5,488 in trading on Monday. Evercore ISI has raised its year-end price target to 6,000, while Goldman Sachs sees it hitting 5,600.
The Nasdaq also recorded a new record price, hitting a high near 17,933. At the closing bell, the S&P, Dow, and Nasdaq all finished in the green up 0.77%, 0.49%, and 0.95%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) broke below support at $66,000 in early trading, hitting a low of $65,046 near midday before a surge in buying led to a spike in BTC price to $67,286.
BTC/USD Chart by TradingView
The bullish momentum was unable to be sustained, however, and Bitcoin has since pulled back to $66,570 at the time of writing, an increase of 0.16% on the 24-hour chart.
An important week for Bitcoin
According to market analyst TedTalksMacro, the week ahead is an important one for Bitcoin amid ongoing disinflation.
“Last week, both CPI + PPI data were optimistic for risk assets, with each showing that the disinflationary trend remains. However, the Fed's message cautioned that the market shouldn't become overly enthusiastic about pricing in rate cuts in the near term,” Ted said. “This week is crucial for maintaining BTC's (and by extension) the broader crypto market's short-term trend.”
“Bulls are keen to see ongoing signs of disinflation to feel confident that the Fed will ease from its current restrictive stance, thereby encouraging traders to venture out on the risk curve - and to invest in assets like cryptocurrencies,” he added. “US tech stocks are certainly feeling the disinflationary vibes, with the NASDAQ breaking out to new all-time highs on anticipation of easier central bank policy to come - note the correlation with Bitcoin.”
Addressing last week's FOMC meeting and comments from Fed officials, Ted said, “While the March dot plot indicated cutting rates 2-3 times in 2024, the Fed showed via June's dot plot, that only 1-2 cuts should be expected.”
“Leading into June's meeting the market had priced only 1-2 cuts by year's end,” he noted. “So, what does this mean? The Fed's revised dot plot for June aligns perfectly with current market pricing, predicting 1-2 rate cuts by the year's end. This alignment likely fulfills the Fed's aim to align market expectations with its own projections, granting greater flexibility in its future communications around rates.”
His main takeaway from last week “is that the data is clearly pointing towards a shift to more accommodative monetary policy—and potentially sooner rather than later.” He said this reinforces his view “that dips are buying opportunities for risk assets like cryptocurrencies + stocks.”
“For the upcoming week, it's critical that Bitcoin maintains its support at $66,000 USD - if broken, sellers could take a stronghold on the market and force quick liquidations out of the bulls,” Ted warned.
He also highlighted interest rate decisions by the Australian and Swiss Central Banks as things to watch out for this week, as well as flows for spot BTC exchange-traded funds following more than $500 million in outflows last week.
While Bitcoin continues to struggle to gain momentum in the mid-$60,000 range, Binance CEO Richard Teng expects a strong end to the year for King Crypto, offering a price target of $80,000, and he expects 2025 will be even better.
“I think 2025 is going to be an even better year than 2024 for the crypto industry in general because the general macroeconomic condition will be much better,” Teng said during an interview on the Bankless YouTube channel. “We’re probably going to see an interest rate reduction towards the end of this year. There’s going to be a much better macroeconomic environment, much more enlightened interest rate environment. So I think all those will boost crypto prices even further in 2025.”
“So my base prediction [at the] end of 2023 was $80,000 [for Bitcoin at the end of 2024]… But what I didn’t predict was the strong robust inflows from the institutions after the launch of [the Bitcoin] ETF,” he said. “I didn’t expect the ETF to be approved so quickly, so early on in the year. My prediction for ETF approval was possibly towards the end of 2024, [or] even 2025.”
Because of this, Teng said he has increased his price predictions. “My price for the end of this year is much higher than $80,000," he said. "I’m not going to give you the price, but it’s much higher than my base price from the end of last year, and I think next year will be a much better year compared to this year. That’s my view.”
He noted that multiple analysts, including those at Standard Chartered, have “predicted Bitcoin should reach $200,000 – if there’s a squeeze it should reach $250,000.”
“So I think there’s still some room to grow, both for Bitcoin as well as tokens such as Ether (ETH),” he said. “That [ETH] ETF has just been approved. Again, with all this approval of ETFs, it brings new liquidity, new user pools. I mentioned $15 billion has flown into the Bitcoin ETFs since the beginning of the year, after the approval. And that’s very robust. We will continue to see pretty robust institutional demand on that front. And that is really very beneficial for the crypto community.”
Broad sell-off in the altcoin market
Altcoins struggled to overcome the early sell-off, and despite Bitcoin's afternoon recovery, only five tokens in the top 200 managed to record gains above 1% on Monday.
Daily cryptocurrency market performance. Source: Coin360
Convex Finance (CVX) was the top gainer, increasing by 25.3%, followed by a 19.7% spike for cat in a dogs world (MEW), and a 5.8% gain for XRP.
zkSync (ZK) was the biggest loser, falling 24.3%, while io.net (IO) lost 22.1%, and ConstitutionDAO (PEOPLE) fell 18.7%.
The overall cryptocurrency market cap now stands at $2.41 trillion, and Bitcoin’s dominance rate is 54.4%.
