As a seasoned researcher with over two decades of experience under my belt, I’ve witnessed numerous market fluctuations and economic turbulence. The recent 3.2% surge in Bitcoin price, despite encountering resistance at $69,200, has piqued my interest.
Between October 27th and October 28th, the value of Bitcoin (BTC) increased by 3.2%. This temporary climb even reached close to $69,200 – a level not seen in a week. Despite some resistance during this rally, optimistic Bitcoin investors think that the groundwork for a prolonged upward trend has been established, taking into account the recent societal, political, and economic developments.
To start the week, oil prices declined by over 5.5% on Oct. 28 after the ongoing conflict in the Middle East failed to impact energy production or transportation channels. Israel launched attacks on Iran over the weekend; however, no oil or nuclear facilities were targeted, as reported by CNBC.
Traders who initially used oil as a safeguard against Middle East conflicts might now be looking into other protective investments, given that the region’s instability continues. As reported by CNBC, the tensions between Israel and Iran have been ongoing for over a year, yet US officials have warned Israel against attacking Iran’s nuclear facilities.
Will uncertainty benefit Bitcoin price?
Concern over inflation persists as it might lead conventional financiers to explore non-traditional investments. Although temporarily, increased prices can bolster company profits, prolonged inflation tends to make consumers cut back on their spending due to financial strain.
As a researcher, I find that corporate earnings tend to showcase past consumer demands due to a ‘delayed response’ or ‘lag effect.’ This is because companies present their financial results from previous quarters, potentially veiling the immediate influence of inflation on current spending patterns.
On October 31st, the upcoming U.S. inflation report will be released, followed by the Federal Open Market Committee meeting on November 7th. Economists anticipate a 0.3% rise in the Core Personal Consumption Expenditures (PCE) index for September, as opposed to the 0.1% increase seen in August. The PCE index and employment market data are two important factors that the Federal Reserve considers when making policy decisions.
According to Wil Stith, bond portfolio manager at Wilmington Trust, there’s a possibility that the Federal Open Market Committee (FOMC) might consider pausing in their rate adjustments because they previously reduced rates by 50 basis points. Despite the majority of the market anticipating more interest rate cuts, the main concern is a cautious Federal Reserve taking a break to assess the potential risks of overheating the economy.
As the U.S. presidential election draws nearer (with just about 10 days left), investors often become more cautious, favoring cash and short-term government securities to minimize unexpected outcomes. The past has shown us that polls can occasionally be inaccurate, which creates a sense of unease for everyone.
No matter who gets elected, there might be an increase in investments towards riskier assets like Bitcoin, due to the decrease in uncertainty following the election. Socially and politically, it seems that conditions could foster a prolonged rally for Bitcoin, although certain factors could pose risks, causing traders to exercise caution before making aggressive bullish moves.
It’s important to note that if inflation exceeds expectations, this could decrease the likelihood of additional central bank stimulus. This underscores Bitcoin’s unique and consistent monetary policy, which is fixed and predictable. Furthermore, should Kamala Harris win the U.S. presidency, her victory might not have an immediate impact on digital assets, but a more transparent approach to cryptocurrency regulation could be suggested.
As a crypto investor, I’m keeping an optimistic outlook for the future, even though Bitcoin might not set a new record high in 2024. However, the early months of 2025 could still present promising opportunities for price growth.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of CryptoMoon.
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2024-10-28 21:50