Cryptocurrency Market Trends: How Fed’s Hawkish Stance Impacts Bitcoin’s October Performance

On Thursday, September 21, 2023, investors responded to the previous day’s comments from Fed Chair Jerome Powell by driving cryptocurrency prices down. Investors became increasingly wary after Powell said interest rates would stay high for a long time. Stocks, including the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite, all closed in the red as investors took a risk-off stance.

Bitcoin’s price fell steadily throughout Thursday, reaching a low of $26,360 at midday. Bulls, however, staged a strong comeback, and the price is now trading over the $26,550 barrier. The futures market was the first to exhibit signs of this deteriorating Bitcoin sentiment, with September Bitcoin futures prices falling sharply in early U.S. trading.

Head of Research at Matrixport Markus Thielen noted that despite the present market attitude, Bitcoin has historically fared well in the month of October. He pointed out that Bitcoin’s average return has been 35% in Q4 over the past nine years, making it the greatest quarter. According to Thielen’s calculations, if this tendency keeps up, Bitcoin’s value may rise to $37,000 by the end of the year.

But not all analysts are as upbeat as this one. Doctor Profit, a financial analyst, believes Bitcoin’s value will decline in the near future and has stated his intention to expand his short position should the price of Bitcoin hit $28,300 to $28,600.

Most of the top 200 alternative cryptocurrencies also experienced losses as a result of Bitcoin’s price drop. Alchemy Pay gained 7.7 percentage points after hearing it had been granted a money transmitter license in Arkansas, and IMX witnessed a 23.11% boost due to increased trading activity on South Korean crypto exchanges.

Principal Ideas:

The stock and cryptocurrency markets have been hit by the Fed’s hawkish stance after comments from Chairman Jerome Powell about the potential for high interest rates to persist for an extended period of time.
The historical data implies that Bitcoin could have a solid performance in October despite the current market pessimism.
Analysts have varying predictions for Bitcoin’s future performance; some are still bullish on the cryptocurrency, while others are bracing for short-term setbacks.

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