(Kitco News) – Investors across asset classes were in high spirits on Friday as a pan-rally lifted the prices for stocks, cryptos, gold, and silver with less than six days to go until the first Fed interest rate cut in a decade.
The sea of green has largely been attributed to rising expectations that the Fed could announce a 50 bps rate cut following the Federal Open Market Committee meeting next Wednesday. The spike in sentiment followed comments from former New York Fed president Bill Dudley, who said there's a “strong case” for a deeper cut.
The CME FedWatch Tool now puts the odds of a 50 bps cut at 49%, up from 28% on Thursday.
Stocks trended higher from the market open, with the major indices trading in the green for the entire day. At the closing bell, the S&P, Dow, and Nasdaq were up 0.54%, 0.72%, and 0.65%, respectively.
At the time of writing, spot gold is up 0.92% on the session and trades at $2,581.80/oz after hitting a new record high above $2586/oz earlier in the day. Spot silver is up 2.8% and trades at $30.68/oz.
“Bitcoin (BTC) looks poised to close the week on a strong note, pushing toward a bullish breakout above the $60,000 mark,” said analysts at Secure Digital Markets. “Earlier today, BTC surged by more than $1,500, jumping from $58,000 to $59,700. This price movement aligns with recent patterns of heightened low-timeframe volatility, oscillating within a six-month descending channel. If this trend persists, we could easily see BTC testing the $62,000 to $64,000 range next week.”
“Meanwhile, Ethereum (ETH) continues to underperform, as highlighted on the ETH/BTC chart,” they added. “The daily chart shows no signs of bearish momentum slowing down for the ETH/BTC pair, indicating it may struggle to keep pace with Bitcoin in the near term.”
Data provided by TradingView shows that Bitcoin continued to climb higher on Friday afternoon, with bulls knocking on the door of resistance at $60,000.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $59,938, an increase of 2.97% on the 24-hour chart.
More volatility expected
While Bitcoin and other assets are finishing the week strong in anticipation of the first rate cut, Lennix Lai, Chief Commercial Officer at OKX Global, told Kitco Crypto that it’s unlikely to be ‘up only’ for asset prices from here, so traders should brace for continued volatility.
“Given the current market uncertainties, the remainder of the month will likely be quite volatile as traders react to broader economic indicators,” Lai said. “While short-term volatility is expected as traders react to economic indicators, the increasing institutional participation in the crypto market could provide more stability and liquidity in the medium to long term.”
According to an economist impact report commissioned by OKX, “69% of institutional investors plan to increase their allocations to digital assets in the next 2-3 years,” he noted, “suggesting a growing confidence in the crypto market despite short-term uncertainties.”
Regarding the drivers behind Bitcoin’s recent price action, Lai said it has been “largely influenced by expectations of an upcoming interest rate cut and speculation about a new rate cut cycle. These macroeconomic factors, combined with shifting investor sentiment, are driving market dynamics.”
“Currently, key support and resistance levels for BTC are around the $50,000 mark,” he noted. “This area is crucial for traders, as it could determine the next direction for BTC's price movements. That said, with increasing institutional involvement and growing mainstream adoption, we may see these levels shift in the coming months.”
In the near term, he said the “outlook for BTC seems cautious, with potential for volatility due to current market conditions and relatively low liquidity.”
“However, my long-term outlook is bullish, supported by several factors,” he added, citing “Increasing institutional adoption and investment; Growing regulatory clarity in key markets; and Expansion of the crypto ecosystem, with the value of tokenized assets expected to surpass $10 trillion by 2030.”
“While it may take longer than anticipated for BTC to reach new all-time highs, I believe the fundamentals of top cryptocurrencies like BTC and ETH remain strong, positioning them for potential long-term growth and resilience,” Lai concluded.
According to cryptocurrency analyst and investor Jason Pizzino, the next phase of the Bitcoin bull market will start once BTC flips $61,500 from resistance into support.
“Provided we start to see some tests and closes above $58,000 in the short term, this could be a nice little early bounce here coming up to test the more important level in my analysis around $61,500, which is the correction 50% from March down to August sliced in the middle,” Pizzino said in a YouTube update. “That’s the next key level there for Bitcoin to test, overcome, and consolidate above for basically the next phase of the bull, pushing into new fresh all-time high prices.”
But like Lai, Pizzino also said that volatility could still play a major factor, and Bitcoin has the potential to fall by over 15% from the current level without invalidating the bullish thesis.
“[Bitcoin] still above roughly $52,000, $53,000 and the August low at $49,000 is still intact here,” he said. “We’ve looked at previous levels to the downside – should this come back down it would still remain in a macro bull market if it came all the way back to the mid-$40,000s. And from that point, closes again back above $61,500 would start to get this show on the road to the upside.”
Altcoins finish the week strong
Like the broader market, altcoins were a sea of green on Friday, with over 90% of the tokens in the top 200 recording gains.
Daily cryptocurrency market performance. Source: Coin360
Nervous Network (CKB) was the breakout star with an increase of 45.3%, followed by gains of 12.1% for Pol (POL) and 11.9% for Popcat (POPCAT). Sun (SUN) saw the biggest decline, falling 6.6%, while BinaryX (BNX) lost 5.4%, and Worldcoin (WLD) fell 5.1%.
The overall cryptocurrency market cap now stands at $2.1 trillion, and Bitcoin’s dominance rate is 56.4%.
