Surpassing $66,000... Favorable Environment from the US Continues [Bitcoin Now]

'Big Cut Implemented' US Interest Rate Cut Boost... Inflation Also Positive
China's Economic Stimulus Improves Risk Asset Sentiment
Industry Expects Rebound Beyond $68,000~$70,000

In the fourth week of September, Bitcoin prices are attempting to surpass $66,000. A favorable macro environment, including the U.S. interest rate cut stance, combined with expectations for China's economic stimulus measures, has contributed to this trend. Additionally, the August U.S. Personal Consumption Expenditures (PCE) data released on the 27th (local time) showed a stronger-than-expected level, fueling expectations that the U.S. Federal Reserve's (Fed) interest rate cut stance will gain momentum. The industry’s attention has turned to whether Bitcoin can break through the '70,000-dollar barrier' once again.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 2:25 p.m. on the 28th (Korean time), Bitcoin was priced at $66,000.18, up 1.13% from the previous day. Compared to a week ago, it rose 4.89%, and compared to a month ago, it increased by 11.19%. Year-over-year, it has recorded a 149.74% increase.

Bitcoin prices, which started at the $62,000 range on the 22nd, maintained an upward trend for two consecutive days starting on the 26th. On the 27th, it surpassed $65,000 for the first time since early August. As of the 28th, it is attempting to break through the $66,000 mark.

The recent bullish trend is believed to be driven by the positive news of U.S. interest rate cuts. The U.S. Federal Open Market Committee (FOMC) held a meeting on the 17th and 18th and decided to cut the benchmark interest rate by 50 basis points (bp, 0.01 percentage points) to 4.75?5.00%. This was a big cut as the market expected. The committee forecasted two more rate cuts this year and four next year. Cryptocurrency specialized media CoinDesk noted, "The rise in Bitcoin prices began last week when the U.S. made its first interest rate cut since the COVID-19 pandemic four years ago."

Moreover, the announcement of a large-scale economic stimulus package in China is also estimated to have positively influenced Bitcoin prices by improving overall risk asset investment sentiment. On the 25th (local time), major foreign media reported that Chinese authorities are considering injecting up to 1 trillion yuan (approximately 189 trillion won) of capital into state-owned banks to stimulate the economy. This is the first time since the 2008 global financial crisis that the Chinese government has injected capital into large banks. Asian stock markets, including China’s, rose broadly, and prices of gold and raw materials also increased simultaneously.

The PCE data released by the U.S. Department of Commerce on the 27th (local time) also impacted Bitcoin’s strength. The personal consumption expenditure inflation rate fell to 2.2% in August, approaching the Fed’s target of 2%. This is the lowest inflation rate in three years and six months since February 2021, falling short of experts’ expectations. Inflation rate is one of the key indicators to gauge the direction of the Fed’s monetary policy.

Matt Mena, a cryptocurrency researcher at 21Shares, told cryptocurrency media The Block, "Investors are flocking to risk assets as they expect the Fed to take a more accommodative stance on interest rate cuts going forward," adding, "This environment is raising the prices of risk assets including Bitcoin and instilling confidence in investors." He also added that the current favorable environment has laid the foundation to break through the $68,000?$70,000 resistance level. Bitcoin’s all-time high was $73,750.07, recorded on March 14 of this year.

According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, stood at 64 points (Greed) as of that day. This is a higher rating than last week’s 54 points (Neutral). Alternative’s Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating optimism.