(Kitco News) – Stocks and cryptos rallied higher on Monday, while gold trended sideways, as concerns about the Middle East conflict cooled while traders braced for an important week of data, which includes the latest update on inflation and the monthly jobs report.
Rising sentiment in the market has been “bolstered by easing geopolitical tensions, as weekend airstrikes by Israel in Iran avoided hitting critical oil or nuclear sites, leading to a decrease in oil prices to around $67 per barrel,” noted analysts at Secure Digital Markets.
“The upcoming week is filled with key economic data: JOLTS job openings report on Tuesday, Bank of Japan's interest rate decision on Wednesday, followed by the core PCE price index on Thursday, and culminating with the crucial non-farm payroll figures on Friday,” they added. “This week also features earnings announcements from five of the 'Magnificent Seven' tech giants—Alphabet, Microsoft, Meta, Amazon, and Apple—which are poised to influence market dynamics.”
While these five are a focal point for investors, 169 of the S&P 500 companies are expected to release updates, with many expecting the latest results to push the index to new heights.
The upcoming election in the U.S. is also influencing markets, with most analysts predicting increased volatility leading up to and possibly in the weeks following the election, especially if it takes an extended period to declare a winner.
To capitalize on the increased focus on the elections, Robinhood announced the launch of new event contracts for betting on the election.
“Election futures contracts are an interesting phenomenon, rising from mostly under the radar decentralized blockchain wager platforms to recent fame with the 2024 election,” noted Henry Robinson, Founder of Magnetar Blockchain, in a note to Kitco Crypto. “Many participants are treating these financial products like a bet they would place on their favorite sports team; however, there is something more here.”
“Major world events have a financial impact on everyone to some degree, and the US presidential election is often a particular driver of change to the global economy,” he said. “With such a polarized political environment in the United States today, the impact of how this election goes could be tremendous.”
“If the outcome of any event can dramatically change my earnings, my business activity, my assets, and so on, then a ‘betting market’ on this event becomes a very important hedge,” Robinson said. “As financial markets evolve and democratize, investors will grow to appreciate these kinds of very specific risk contracts more and more because sharper tools create the capacity for the most sophisticated portfolio construction. It's a smart move for Robinhood to come to the table early.”
At the closing bell, the S&P, Dow, and Nasdaq all finished in the green, up 0.35%, 0.72%, and 0.37%, respectively.
Spot gold fell in early trading but pared its losses as the day progressed, and at the time of writing, trades at $2,741.80 for a decrease of 0.22% on the session.
Data provided by TradingView shows that Bitcoin (BTC) rallied from support at $67,600 to touch $70,000 in the afternoon before bears turned up the pressure in an effort to prevent further gains.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $69,680 for an increase of 2.96% on the 24-hour chart.
A bumpy road to $100k
While near-term volatility is expected, most analysts agree that Bitcoin’s future is bright, and once the market moves past the current headwinds, it's on track to hit $100,000 and beyond.
“BTC looks and feels like it could go supernova in the coming months,” said Ed Hindi, Chief Investment Officer of Tyr Capital, in a note to Kitco Crypto. “It dominates the total value of crypto assets, having recently hit a 58% dominance ratio.
“As BTC continues to grab attention and headlines, it is absorbing an increasing share of the industry’s liquidity, likely reducing the altcoin upside in the months ahead,” he added. “Institutional champions like MicroStrategy are in the process of opening the floodgates of corporate balance sheets, while respected investors like Paul Tudor Jones are making BTC’s position in financial portfolios mainstream.”
“We strongly believe BTC could reach $100k by the end of this year and trade as high as $200k in 2025,” Hindi said. “We expect the move up in BTC to gather strength in the run-up to the US elections, provided a Trump win remains the base case.”
But it won’t be up only, he warned, as “Profit-taking could weigh on the price of BTC in the days following the result announcement, yet dip buyers should maintain support strong below $60k. Irrespective of the outcome of the election, BTC should regain its footing in the medium term and target new highs in 2024.”
As Bitcoin transitions from a speculative risk asset to a legitimate reserve asset, Hindi said they “expect BTC to more closely track gold and oil prices during periods of heightened geopolitical uncertainty as unlike conflicts in the last 80 years US hegemony is what is currently at stake.”
“The US has also openly started weaponizing the USD to deter its present and future foes,” he noted. “History has shown that the debasement of a hegemon’s currency typically precedes its fall. The increase in global ‘proxy’ conflicts will slowly erode trust in the USD and its supporting infrastructure and hence further provide tailwinds to BTC and gold.”
“Loosening global monetary and fiscal policies will maintain a floor under BTC,” he added. “Money supply has historically been the best predictor of BTC price action. Disinflation, the global economic slowdown, and the increase in defense spending will force most major countries to keep the liquidity tab open for the foreseeable future. The resulting debasement of fiat currencies will most probably push risk capital into assets like BTC and gold.”
According to TradingView analyst TradingShot, “All indicators aligned for an incredible 12-month rally.”
“Bitcoin broke last week above its 7-month Bearish Megaphone pattern, which was essentially the pattern that absorbed via a relief pull-back the incredible rally that the market had since October 2023, fueled at large by the ETF speculation and then launch,” he noted.
“This pattern is, as you can see, part of a greater 7-year Channel Up that encompasses the last two Cycles of BTC,” TradingShot said. “Halfway through the 2018 - 2021 Cycle, the market also had a Bearish Megaphone, a little larger, lasting for 12 months before the price broke above it.”
“That bullish break-out came when the price regained the 1W MA50 (blue trend-line) as Support, and until the Cycle Top, it was never compromised again,” he highlighted. “In an amazing display of Cycle symmetry, Bitcoin is also being supported by the 1W MA50 right now (has been since the March 13, 2023, weekly candle), in fact, it was successfully tested and held 3 times since August 05, 2024.”
“The Megaphone break-out and the 1W MA50 support aren't the only bullish indicators that point to a heavy price increase next,” TradingShot added. “Perhaps the most important of all is the (L) MACD Bullish Cross on, also on the 1W time-frame, the first such formation in a whole year (since October 23, 2023). This is a huge development as it comes after 7 months of non-bullish price action, indicating a shift in trend.”
He noted that "When all those indicators were aligned in mid-2020, BTC kickstarted the 2nd, final, and most aggressive Rally of its Cycle. It was +65% stronger than the 1st Rally. As a result, we may experience in the next 12 months a rally of +615% (65% greater than the +373% 1st Rally).”
“But if this seems too great without a catalyst like the ETF launch was in January, even if BTC replicates the bullish price action of November 2022 - March 2024, it will still hit the 200k mark,” he concluded. “What history has shown, at least, is that we can stay bullish until a 1W candle closes below the 1W MA50, whether that's at 100k, 150k, or 200k and above.”
Mixed start to the week for altcoins
While Bitcoin rallied to $70,000, altcoins traded mixed as investors focused on the highest quality projects, while the more risky tokens recorded losses.
Daily cryptocurrency market performance. Source: Coin360
Dogecoin (DOGE) led the field with an increase of 11.1%, while Bitcoin SV (BSV) gained 10% and THORChain (RUNE) increased by 8.3%. Safe (SAFE) was the biggest loser, falling 9.2%, followed by losses of 7.2% and 6.5% for ApeCoin (APE) and ZetaChain (ZETA), respectively.
The overall cryptocurrency market cap now stands at $2.34 trillion, and Bitcoin’s dominance rate is 58.7%.
