(Kitco News) – Traders showed signs of indecision on Tuesday as volatile price action dominated most markets, except for precious metals, with spot gold extending its record-setting rally as it surpassed $2,660/oz for the first time in history.
“The markets have been quite choppy, lacking any clear direction,” said analysts at Secure Digital Markets. “Recently, equities have captured more attention, driven by rising valuations following post-Fed momentum. With this backdrop, the market remains vulnerable to signs of faster economic softening. Today’s release of weaker-than-expected CB Consumer Confidence data triggered a dip in both equities and crypto assets.”
The dip in stocks and crypto was short-lived, however, as news of China’s broad stimulus package spread and helped reinvigorate optimism in European and U.S. equity markets.
“The People's Bank of China took aggressive steps this week to address its economic slowdown,” the analysts noted. “In a rare press briefing, the PBOC cut the reserve requirement ratio by 50 basis points and lowered the minimum down payment on mortgages to 15%. These measures aim to stabilize domestic markets, but the global impact remains uncertain.”
According to analysts at QCP Capital, China’s aggressive monetary measures, combined with the U.S. Federal Reserve's recent 50-basis-point rate cut, indicate a global trend of easing that may support risk assets, including cryptocurrencies, in the near future.
At the close of markets, the S&P, Dow, and Nasdaq all finished in the green, up 0.25%, 0.20%, and 0.56%, respectively.
Data provided by TradingView shows that Bitcoin oscillated around $63,200 on Tuesday, with resistance at $64,000 continuing to give bulls a challenge.
BTC/USD Chart by TradingView
“Bitcoin remains locked in a trading range for over 125 days, with September demonstrating unexpected strength,” noted Secure Digital Markets analysts. “BTC has defied bearish seasonality with a 22% rally from a low near $52,500, keeping traders focused on a potential break above $65,000. Such a move would reestablish bullish sentiment by surpassing previous highs.”
At the time of writing, Bitcoin trades at $64,275, an increase of 1.41% on the 24-hour chart.
Bright future for Bitcoin and gold
Bitcoin has seen a bullish turnaround in September after initially falling below $53,000 during the first week of the month.
“We got off to a rocky start in September, very much in line with the historical trend, before things turned around in a big way the other week,” said Joel Kruger, market strategist at LMAX Group, in a note to Kitco Crypto. “As a reminder, September is the worst month for crypto, with Bitcoin down nearly 5% on an average return basis from 2013 to 2023.”
“But as we come into the final days of the month, we’re staring at month-to-date Bitcoin performance of 7.25%,” he noted. “Ether has followed along, producing month-to-date returns of 4.90%. A lot of the move has been driven on positive momentum from the Fed decision in which the central bank slashed rates by 50-basis points.”
“As highlighted on Monday, the Fed move has been extremely bullish for crypto assets as it has made the US Dollar less attractive, invited upside pressure on inflation (making limited supply deflationary crypto assets more attractive), all while inspiring an uptick in overall investor risk appetite,” Kruger said. “We’ve since seen a return of ETF inflows, which has extended to the ETH ETFs as well in recent days. We’ve also seen a continued push higher in the stablecoin market, a positive reflection on demand for the asset class.”
From a technical perspective, Kruger noted that “initial resistance for Bitcoin comes in at $65,000” and said, “We will need to see a clear break of this psychological barrier to open the next wave of upside momentum towards a retest and break of the record high.”
Bulls are widely expected to easily clear $65,000 in the months ahead, especially if Bitcoin sees a positive close to September, as history shows it has a strong showing during the fourth quarter in years where it makes gains in September.
#Bitcoin is currently on track for the strongest September performance in its history.
Close this month in the green, and the odds are high October, November and December will close green as well ??
Q4 looks promising. Very promising. pic.twitter.com/tNx5ZBCp2Y— Jelle (@CryptoJelleNL) September 23, 2024
“October and November are far and away the best months for crypto asset performance, so the market should be looking forward to making the transition into Q4,” Kruger concluded.
And with gold’s continued ascent to new record highs, TradingView analyst Arman Shaban said recent developments could soon see the yellow metal surpass $3,000.
“By analyzing the #gold chart on the 2-hour timeframe, we can see that the price has risen to $2640, marking a new high,” he wrote in an update on Tuesday.
“These days, we are witnessing gold setting new all-time highs daily, and many analysts, including myself, expect that if the downward trend in interest rates and the conflict between Israel and Hezbollah in Lebanon continue, we could potentially see gold rise to $3000 in the mid-term,” Shaban said. “However, if the price closes below $2640 today and doesn't break a new high, we could expect a correction down to $2617 as the first target. Gold is currently trading around $2632.”
Altcoin uptrend continues
Bitcoin’s resilience has helped encourage traders to re-engage with the riskier altcoin market, with a majority of tokens in the top 200 recording gains on Tuesday.
Daily cryptocurrency market performance. Source: Coin360
Echelon Prime (PRIME) was the biggest gainer, increasing 21.3%, followed by a 14.9% rally for dogwifhat (WIF) and a 12.4% spike for Altlayer (ALT). Aave (AAVE) was the biggest loser, falling 6.6%, while Catizen (CATI) lost 6.6%, and MX Token (MX) fell 5.3%.
The overall cryptocurrency market cap now stands at $2.25 trillion, and Bitcoin’s dominance rate is 56.3%.
