Bitcoin is pressing greater in spite of traditional risk-off action in standard markets. The cryptocurrency’s resilience has raised investors’ hopes for a stellar rally in October.
As of 11:16 UTC, the cryptocurrency was trading 8% greater on the day near $47,400. The broader crypto market is also positive, with native cryptocurrencies of smart-contract blockchains like VeChain, Tezos and Elrond gaining more than 8%. Ethereum’s ether currency traded 7% greater at $3,245.
S&P 500 E-mini futures, meantime, are nursing a loss, indicating a lower opening for the benchmark stock index. The dollar index, which tracks the worth of the greenback versus significant fiat currencies, is trading simply except the 12-month high of 94.50 reached Thursday.
Reduced probability of a regulatory clampdown on crypto markets seems to be cushioning bitcoin from the instability of traditional markets. On Thursday, Federal Reserve Chairman Jerome Powell informed Congress the reserve bank has “no intention” of prohibiting cryptocurrencies, consisting of stablecoins. Powell’s comments came a day after U.S. Securities and Exchange Commission Chairman Gary Gensler reiterated support for bitcoin futures-based exchange-traded funds (ETF).
The belief in the crypto community appears rather bullish, with numerous experts and traders describing October as “Uptober” on Twitter – a freshly created slang, representing expectations for a rate rally this month.
After all, October is a seasonally bullish period, and bitcoin’s recent stability amid stock market losses and China’s blanket ban on virtual currency businesses is reminiscent of the cryptocurrency’s resilience in the face of the negative news seen just before the beginning of the bull run from $10,000 in September and October 2020.
A year earlier, bitcoin stayed secured the series of $10,000 to $11,000 throughout September and early October in spite of a significant pullback in the S&P 500. The cryptocurrency absorbed multiple negative news like exchange hacks and the U.S. Commodity Futures Trading Commission’s charges against the then major crypto exchange BitMEX. What followed was a stellar six-month bull run to $64,800.
It stays to be seen if history will duplicate itself. While increasing inflation expectations around the world and falling genuine or inflation-adjusted bond yields are helpful of a restored bull run, the Fed’s impending taper – or downsizing – of stimulus might decrease the climb.
Last month, the U.S. central bank signaled that the taper would begin in the final quarter and might end by mid-2022, assuming there are no new economic shocks.
Fears of a much faster Fed taper might grip markets, bringing discomfort for possession costs, in basic, if the U.S. core individual intake expense information due at 12:30 UTC today blows past expectations.
According to CNBC, the Fed’s preferred gauge of inflation could show moderation in August after rising 3.6% year on year in both June and July. Analysts at TD Securities foresee an unchanged reading.
“The core PCE price index appears to have risen more than the core CPI in August (an estimated 0.26% versus 0.10%), boosted by data from the PPI. The YoY change likely remained high at 3.6%,” TD Securities’ analysts said, according to FXStreet.
Data launched early today revealed eurozone inflation increased 3.4% on a yearly basis in September, striking the greatest reading considering that September 2008.
