Crypto market regains bullish momentum as BTC surges

Hola folks!

The past week has been good for the crypto market. BTC, the benchmark crypto, recorded a remarkable 9% gain in September, and similar gains were also observed in the broader crypto market. 

The crypto buildup signals a bullish October, which is also supported by central banks in the US and China loosening their monetary policy, leading to an increase in liquidity in the global economy. 

Today’s email highlights the major crypto moves in the past week and also throws light on the expected crypto moves in the week ahead. Read on to learn more about movers and shakers of the crypto market.  

Bitcoin is wrapping up September with a remarkable 9% gain, its best performance for this month since 2013. On both the weekly and monthly charts, Bitcoin has set a higher high, breaking a six-month-long downtrend defined by lower highs. This shift signals a potential trend reversal, with traders anticipating a move toward $70,000, building from its current level around $66,000. 

A fresh set of catalysts has reignited market momentum, including a surge of $494 million in spot Bitcoin ETF inflows, bringing the cumulative total to $18.8 billion. MicroStrategy’s massive accumulation of 25,720 BTC over the past two months further strengthened the bullish narrative. The company acquired 18,300 Bitcoin between August 6 and September 12, followed by an additional 7,420 BTC on September 20.

The broader macroeconomic environment is also contributing to Bitcoin’s positive outlook. With the global money supply set to expand due to central bank rate cuts, investors are preparing for a potential return to loose monetary policies. 

The People’s Bank of China (PBOC) announced rate cuts and liquidity injections, which align with the expansion in Bitcoin prices. In the US, expectations are rising for the Federal Reserve to ease its monetary policy, potentially driving yield-seeking investors toward Bitcoin and other cryptocurrencies. 

With Bitcoin now just 12% off its all-time high of $73,738 (set in March 2024), the current market sentiment is bullish. Traditional market indices like the S&P 500 and Dow Jones, as well as assets like gold, hit new all-time highs this week, adding further optimism. 

However, the Crypto Fear & Greed Index, now above 66 and sitting in the “Greed” zone, suggests caution. Historically, such high levels of retail bullishness have signaled prudence, indicating the market may be overextended.

Altcoins too had an exciting week. Memecoins such as PEPE, BONK, SHIB, WIF, and DOGE outperformed the market, while Layer 1 blockchains like SUI and SEI experienced significant growth in Total Value Locked (TVL) and Daily Active Users (DAU), contributing to their price surges. 

Ethereum made headlines, with over 14 million ETH now locked in liquid staking derivatives (LSD) protocols, a 0.64% increase over the past 12 days. 

Although rumors circulated about the FTX bankruptcy estate distributing funds to creditors by September 30, these remain unverified, with potential reimbursements likely postponed until 2024 or later. Analysts suggest that once approved, the reimbursement could inject $5 billion to $8 billion into the market, potentially driving prices higher across the crypto space. 

As we head into October, historically one of Bitcoin’s strongest months, the stage is set for a continuation of the bullish momentum across the entire crypto market.

• BTC $64,309 ⏫ 1.31%

• ETH $2,641 ⏬ 0.17% 

• BONK $0.00002367 ⏫ 37.26% 

• WIF $2.37 ⏫ 40.20% 

(All data here is as of 2.30 p.m., 30 September 2024)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• US-based spot bitcoin exchange-traded funds have extended their inflow streak to seven straight trading days, with Sept 27th inflows marking the largest single-day intake since early June, a nearly four-month high. Read more here. 

• Ethereum exchange-traded funds have logged their highest weekly inflows since early August in a reversal of six straight weeks of negative outflows, with one fund broaching a significant milestone: more than $1 billion in net asset value. Read more here.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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