Today, Friday, September 20, 2024, the price of Bitcoin is rising and does not seem to want to stop its bull run.
To tell the truth, the rise actually started on Monday, September 9, but only today did it return to the 64,000$ mark, albeit only for a brief moment.
The rebound of Bitcoin price: why is it rising today?
The turning point was most likely on August 5th.
From March 14, when it marked the new all-time high, a long period of lateralization began, which lasted until the first of August. This lateralization was characterized by a bottom placed around $57,000.
Instead, starting from August 2nd, a strong and rapid decline began, which brought the price of Bitcoin even below $50,000, although only for a brief moment, precisely on August 5th.
At that point, it seemed that a decline had begun, but instead it was later discovered that the period of lateralization that had been lasting for months had simply transformed into a descending lateralization.
The important thing is that the reaction to the crash on August 5th was immediate, so much so that the very next day the price of BTC had already returned around the fateful mark of $57,000, and three days later it had already returned above $60,000.
The rise in the price of Bitcoin, today it goes up again
Despite this, at the beginning of September there was another drop, which had thrown the crypto markets into a bit of a panic.
In fact, starting from August 26, the price of BTC first returned to $58,000, then dropped below $53,000 for a brief moment.
The turning point was precisely Monday, September 9, when not only the early September crash now appeared to be definitively over, but when the price managed to return to $58,000 the following day.
At that point, however, it might also have seemed that the dynamics of August could repeat, with a brief rise above $60,000 and a new drop.
Instead, after returning to $60,000 last Friday, it only had a brief fallback to $58,000 on Monday, before bouncing back again and starting the latest climb.
The thing that gives hope is that after the further return to $60,000 on Tuesday, the subsequent drop stopped above $59,000, and already yesterday, after the news of the Fed rate cut, the price of BTC managed to climb back above $62,000.
Today the rise is simply continuing.
The role of the Fed
The fact that the financial markets had already started to price in a 50 basis points rate cut by the Fed suggests that the Fed itself played a key role in the recent bull and bear trends.
In fact, if we take the US stock markets as a reference, this trend actually started on Monday the 9th, so it has been in place for almost two weeks.
The cut in interest rates favors credit, and therefore should increase the liquidity in circulation. Financial markets have long depended on liquidity, so if this increases, it is very likely that the markets will react well.
Furthermore, on Wednesday the Fed not only cut rates, but also said that more cuts are very likely to follow, in November and December, and throughout the course of 2025.
Although the markets expected about ten cuts, while the Fed foresees six or seven, in the end the markets settled, also because the Fed still has time to change its mind on this specific point of view.
The economic/financial data coming from the USA is largely positive, so much so that the president of the Fed has stated that he does not see a recession on the horizon.
The beginning of the bull run
At this point, all the attention of the crypto markets shifts to the possible start of a new bull run.
Although there is no certainty about it, the conditions seem to be in place, and in the past, all three times there was a Bitcoin halving, a great bull run started after the presidential elections in the USA.
Indeed, if in 2012 there were first the elections, then the first halving of BTC, and then the beginning of the bull run, in 2016 and 2020 there was first the halving, then the beginning of the bull run at the end of October, and then the elections at the beginning of November.
This year the presidential elections in the USA are held on November 5th, so it is at least possible to imagine that once again at the end of October a new bull run could begin.
The key to this dynamic seems to be linked to the dollar, which often weakens after the elections, given that before the elections it tends to strengthen a bit too much. This year, to tell the truth, the weakening of the dollar started months ago, but there is not yet a real and strong decline.
The rise today still does not seem like the beginning of a bull run, also because there is still a month left until the last part of October. The markets will probably try to anticipate this trend if they believe that things will indeed go this way, but it is a bit difficult for them to try to anticipate it by a month.