Gold shines as stock rally fizzles, Bitcoin consolidates below $63k
NEW YORK (September 21) Gold stole the show on Friday as asset prices from stocks to cryptos saw declines following Thursday’s euphoric rally higher, while the yellow metal kept the party going, climbing above $2,620 for the first time in history to close out the trading week.
The return to a level-headed approach comes as traders realize there are still plenty of roadblocks to growth ahead, with Wall Street wondering if the Fed waited too long to cut rates, risking the success of a ‘soft landing.’
Some analysts have warned that the Fed’s 50 bps rate cut and projections for additional rate cuts before the end of the year raise the risk of a bubble in stock prices as investors chase gains at te prospect of the return to easy money.
This outlook was further reinforced by Federal Reserve governor Michelle Bowman, who was the sole dissenter in the Fed’s decision to cut by 50 basis points. “A smaller first move in this process would have been a preferable action” because inflation is still not down to the central bank's 2% target, Bowman said in a statement released Friday.
“I see the risk that the Committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate,” she added. “We have not yet achieved our inflation goal.”Bowman said she agreed that a rate cut was necessary but argued that moving at a “measured pace toward a more neutral policy stance will ensure further progress in bringing inflation down to our 2% target,” adding that this approach “would also avoid unnecessarily stoking demand.”
“The U.S. Federal Reserve implemented rate cuts, while the Bank of England held steady, and the Bank of Japan decided against further hikes on Friday, a departure from their July decision that had previously triggered a downturn in crypto markets,” noted analysts at Secure Digital Markets. “Moving forward, macroeconomic indicators will play a critical role in shaping price action.”
“Equities pulled back slightly on Friday, paring gains from earlier sessions but still closing the week in positive territory,” they added. “Market volatility is expected to persist, with the upcoming election looming large as the key factor shaping market movements. Market sentiment remains broadly bullish, especially in light of the U.S. 2Y/10Y Treasury spread turning positive for the first time since June 2022, signaling optimism and a shift towards risk-on assets.”
For now, markets continue to digest Wednesday’s rate cut, with some taking profits following yesterday’s breakout performance. At the closing bell, the Dow finished up 0.09% while the S&P and Nasdaq lost 0.19% and 0.36%, respectively.
“Bitcoin extended its weekly rally, gaining 11% amid significant central bank activity,” Secure Digital Markets analysts said. “On the order books, sell offers are clustering between $64,000 and $65,000, while buy orders are consolidating between $61,000 and $62,000. Given the recent price surge, market activity appears somewhat overstretched, and we anticipate a potential pullback toward $61,000 in the near term.”
Data provided by TradingView shows that Bitcoin (BTC) is now consolidating below $63,000 after hitting a high of $64,142 in the early hours of Friday.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $62,920, a decrease of 0.33% on the 24-hour chart.
Bullish Q4 for BTC
After trading sideways since March, analysts widely expect Bitcoin to trend higher in the fourth quarter.
“I think Bitcoin’s still set for new all-time highs in the coming Q4,” said analyst and trader Kevin Svenson in a recent YouTube update. “I think it’s likely that in Q4, we hit new all-time highs. There may be some chop around [$73,800], still at a slightly higher level. And then going into the New Year, that’s when we might start to see things begin to change.”
Svenson pointed to the Relative Strength Index (RSI), an indicator used to determine overbought or oversold conditions, to justify his case, saying it's flashing a potentially bullish signal for Bitcoin on the weekly time frame.
“We’re sitting on a potential weekly RSI breakout level,” he said. “And whenever this happens in the past, this is very bullish. It means like a half year up. Half year up! And if we get this breakout that means half-year pumping into the New Year. Doesn’t mean we’re going to go up in a straight line, we could still chop along this level. But then into 2025, we may see a lot more bullishness.”
Market analyst Rekt Capital aligned with Svenson, telling his YouTube subscribers that Bitcoin is “on the cusp of a breakout into the parabolic phase” after spending the past few months in a re-accumulation phase.
“So if we just see that 160 days after the halving is how long this re-accumulation phase lasts and we tend to see a bull market peak 550 days after the halving, then this parabolic phase should last 390 days or so, 400 days or so,” he said. “So it is roughly a year of parabolic upside that we see going into the bull market peak. And if that continues, indeed mid-September 2025, mid-October 2025 is when we would see a bull market peak occur for Bitcoin.”
With 151 days since the Bitcoin halving, Rekt Capital said that based on historical precedent, King Crypto could hit a new all-time high over the coming days.
“We will reverse towards the upside at some point,” he said. “And that point is coming quite soon because 160 days after halving is when we see a breakout to new highs.”
Altcoins close the week mixed
The altcoin market finished the week mixed, with the top 200 evenly distributed between winners and losers.
Daily cryptocurrency market performance. Source: Coin360
Sui (SUI) led the field with an increase of 11.7%, followed by gains of 11.4% and 10.5% for Gas (GAS) and Bittensor (TAO), respectively. Baby Doge Coin saw the largest decline, falling 17.5%, while ZetaChain (ZETA) lost 9%, and io.net (IO) fell 7.7%.
The overall cryptocurrency market cap now stands at $2.18 trillion, and Bitcoin’s dominance rate is 56.7%.
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