Matrixport Market Observation: BTC Enters a Range Consolidation Phase, Market Requires New Catalysts for Support

Due to the significant interest rate cuts by the Federal Reserve, BTC has shown a fluctuating upward trend over the past week. BTC reached a high of $64,745 on September 23 before pulling back, with a maximum weekly increase of 9.4%. Currently, BTC has entered a consolidation phase, fluctuating around $63,200. If BTC successfully stabilizes above the support level of $64,000, it is expected to challenge the next resistance level, potentially leading to greater market volatility (the above data is sourced from Binance spot market, September 24, 15:00).

The FOMC's 50 bp rate cut is the main reason for the recent rise in crypto assets. Although the U.S. election is also a major catalyst for the current market, Harris, who has not publicly supported crypto assets, is leading in the polls. Due to the market's short-term narrative shifting to the FOMC, current polls have not excessively pressured crypto assets.

The Federal Reserve's significant 50 basis point rate cut not only boosted market sentiment but also indicates that the U.S. will enter a loose monetary cycle. Precious metal prices, represented by gold, have risen accordingly, and U.S. stocks have repeatedly hit historical highs. As of the close on September 23, the three major U.S. stock indices rose slightly, with the Dow Jones and S&P 500 indices setting new closing historical highs. The Dow rose 0.15% to 42,124.65 points; the Nasdaq rose 0.14% to 17,974.27 points; the S&P 500 index rose 0.28% to 5,718.57 points.

Market Environment

Several Federal Reserve officials express views on rate cuts, highlighting the Fed's greater focus on employment issues

On September 23, several Federal Reserve officials expressed their views on rate cuts. Federal Reserve's Goolsbee stated that more rate cuts may be needed in the coming year, and rates need to decrease significantly. Additionally, he expressed satisfaction with the Fed's 50 basis point cut, indicating that the Fed is focused on employment risks rather than just inflation issues.

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

Federal Reserve's Bostic believes that the 50 basis point rate cut at this meeting does not "lock in" the pace of future rate cuts. The normalization process of the economy is "faster than previously expected," and monetary policy needs to be adjusted accordingly.

The Bank of Japan states that if trend inflation rises as predicted, it is appropriate to raise interest rates

According to Jinshi Data, Bank of Japan Governor Ueda Kazuo stated, "If trend inflation rises as we predict, it is appropriate to raise interest rates. If the economic and price trends align with our quarterly outlook report, we will raise interest rates. The Bank of Japan must implement monetary policy timely and appropriately without setting a fixed timetable, while considering various uncertainties."

U.S. BTC Spot ETF sees net inflow for three consecutive trading days

Lookonchain data shows that on September 23, the U.S. BTC spot ETF had a net inflow of $4.53 million, achieving net inflow for three consecutive trading days. Among them, the Bitcoin spot ETF with the highest single-day net inflow was Fidelity ETF FBTC, with a single-day net inflow of $24.928 million. Currently, Fidelity holds 177,067 Bitcoins, worth approximately $11.2 billion.

Suggested Allocation

With regulatory policies tightening further and the lack of new catalysts for crypto assets leading to insufficient upward momentum, it is recommended that investors reasonably allocate assets, reduce reliance on a single market, and narrow the risk exposure brought by short-term market fluctuations. At the same time, profits can be taken to ensure stable APY income. Long-term investors should closely monitor medium to long-term opportunities in the market and consider allocating some stable cost protection products (Shark Fin, Trend Smart Win, etc.) to ensure basic returns and earn interest on held coins.

As a leading one-stop crypto financial service platform globally, Matrixport offers users a variety of asset management products, including dual currency investments, snowballs, shark fins, trend smart wins, seagulls, and other structured products; quantitative strategies, passive strategies, and other strategic investments. The above products support multi-currency investments with a wide range of investment periods to choose from.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers or invitations may be prohibited by law. Digital asset trading may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided in this content.