Matrixport Market Observation: BTC enters range consolidation phase, the market needs new catalyst support

Affected by the Feds sharp interest rate cut, BTC has shown a fluctuating upward trend in the past week. BTC reached a high of $64,745 on September 23 and then retreated, with the largest increase of 9.4% during the week. Currently, BTC has entered a range consolidation phase and is currently fluctuating around $63,200. If BTC successfully stands at the $64,000 support level, BTC is expected to challenge the next resistance level, or bring greater market fluctuations (the above data is from Binance spot, September 24 15: 00).

The FOMCs 50 bp rate cut is the main reason for the recent rise in crypto assets. Although the US election is also a major catalyst for the current market, Harris, who has not publicly supported crypto assets, is leading in the polls. As the markets short-term narrative focus shifts to the FOMC, current polls have not yet put excessive pressure on crypto assets.

The Feds 50 basis point interest rate cut not only boosted market sentiment, but also meant that the United States would enter a loose monetary cycle. The price of precious metals, represented by gold, rose accordingly, and U.S. stocks also hit record highs. As of the close of September 23, the three major U.S. stock indexes closed slightly higher, with the Dow Jones and SP 500 hitting record closing highs again. The Dow Jones rose 0.15% to 42,124.65 points; the Nasdaq rose 0.14% to 17,974.27 points; and the SP 500 rose 0.28% to 5,718.57 points.

Market Environment

Several Fed officials expressed their views on interest rate cuts, highlighting that the Fed is more concerned about employment issues

On September 23, several Fed officials expressed their views on interest rate cuts. Fed Governor Goolsbee said that more interest rate cuts may be needed in the coming year and that interest rates need to drop significantly. In addition, he was satisfied with the Feds 50 basis point interest rate cut, which showed that the Fed was concerned about employment risks, not just inflation.

Kashkari of the Federal Reserve expects the Feds policy rate to be 4.4% at the end of 2024 and 3.4% at the end of 2025, which is consistent with the median forecast of Fed policymakers. The Fed will take smaller interest rate measures in the future.

Feds Bosti believes that the 50 basis point rate cut at this meeting does not lock in the pace of future rate cuts. The economic normalization process is faster than previously expected, and monetary policy needs to be adjusted accordingly.

Bank of Japan says it would be appropriate to raise interest rates if trend inflation rises as forecast

According to Jinshi Data, Bank of Japan Governor Kazuo Ueda said, If trend inflation rises as we forecast, it will be appropriate to raise interest rates. If economic and price trends are in line with the forecasts in our quarterly outlook report, we will raise interest rates. The Bank of Japan must implement monetary policy in a timely and appropriate manner, without setting a fixed timetable, while taking into account various uncertainties.

US BTC spot ETF has seen net inflows for three consecutive trading days

Lookonchain data shows that on September 23, the US BTC spot ETF had a net inflow of 4.53 million US dollars, achieving net inflow for three consecutive trading days. Among them, the Bitcoin spot ETF with the largest single-day net inflow was the Fidelity ETF FBTC, with a single-day net inflow of 24.928 million US dollars. The current total historical net inflow of FBTC has reached 9.805 billion US dollars. Fidelity currently holds 177,067 bitcoins, equivalent to approximately 11.2 billion US dollars.

Suggested Layout

With the further tightening of regulatory policies and the lack of new catalysts for crypto assets to rise, it is recommended that investors rationally allocate assets, reduce dependence on a single market, reduce risk exposure caused by short-term market fluctuations, and appropriately pocket profits to ensure stable APY income. Long-term investors can pay close attention to medium- and long-term opportunities in the market, and can allocate some stable cost protection products (Shark Fin, Trend Win, etc.) to ensure basic income and earn interest on holding coins.

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