Crypto Market Surges on Fed Rate Cut Expectations
Working title: "Bitcoin, Ethereum Surge Amid Market Optimism: Chartist Bob Loukas Predicts Further Gains"
@Mark, I think you should take on this article. You have a good understanding of the overall cryptocurrency and stock markets, don't you? The topic this time is about the recent uptrend in Bitcoin and Ethereum.
Alright, let's begin the analysis.
Bitcoin (BTC) and Ether (ETH) had a strong day in the past 24 hours, rising 2%-3% respectively. Bitcoin almost reached $60,000 on Friday, also showing strong gains in the traditional markets. The set bottom for Bitcoin was last week, and according to daily cycle theory, it's likely to rise further, as mentioned by chartist Bob Loukas.
The Federal Reserve (Fed) is expected to cut interest rates next week, but market participants are divided on the extent of the cut. Some anticipate a 25 basis points (bp) cut, while others expect a larger 50bp cut. According to the CME FedWatch Tool, the probabilities are almost split.
Bitcoin temporarily fell by about 1% to $57,600 after software company MicroStrategy purchased 18,300 BTC for $110 million but quickly recovered losses and surged to close at $59,700.
Ethereum (ETH) surpassed $2,400 again, rising 2.7% over the same period. According to the cryptocurrency analysis company IntoTheBlock, Ethereum’s fee revenue increased by almost 60% last week.
The CoinDesk 20 Index rose by 2.5%, led by double-digit gains in Polygon's native cryptocurrency MATIC. This was a result of the newly upgraded POL token being added for spot and perpetual trading on Binance.
The U.S. stock market also showed gains, with the S&P 500 index rising to within 1% of its July record high. Gold prices hit an all-time high of $2,600 per ounce, and the decline in the U.S. dollar against major currencies supported a rally across assets.
According to Bob Loukas’ daily cycle analysis of Bitcoin, the asset’s cycle means that price movements have waves and a certain periodicity. This means forming highs and lows at specific intervals. Loukas explained that Bitcoin formed a local bottom below $53,000 on September 6 and is now just on the seventh day of a new cycle. The previous daily cycle lasted more than 60 days, peaking on the 24th. Therefore, he suggests that BTC has ample time to set a new high.
The key event to watch next week is the Federal Open Market Committee (FOMC) meeting. This meeting is expected to solidify the first rate cut by the Federal Reserve since 2020. Some observers expect the rise in risk assets to continue due to the U.S. economy’s resilience, although there are also concerns about a potential upcoming recession.
Aha, these are the main points of the current market trends. Considering the impacts of these variables comprehensively on the cryptocurrency market, they are likely to play a significant role in upcoming price fluctuations.
I've translated the content and provided a summary of the main points in English. Let me know if there is anything specific you'd like to focus on!
Mark, I read through your revised analysis and I have some feedback to offer. Don’t worry, it’s nothing too difficult. Let's take it step by step.
First, let's highlight the good points. The daily cycle theory by Bob Loukas that you cited is quite intriguing and can offer readers a fresh perspective. Moreover, your explanation regarding MicroStrategy’s Bitcoin acquisition is excellent. It explains well how significant players’ trades can impact the market. "When major players like MicroStrategy purchase Bitcoin on a large scale, it can create significant ripples in the market." This part will act as essential information for readers.
Next, let’s talk about the parts that need improvement. Firstly, your explanation concerning interest rate cuts is a bit complex and lengthy. “Interest rate cuts could ease inflation and make borrowing easier in the market, leading to increased consumption and investment.” This could be simplified a bit. For example, "Interest rate cuts can potentially drive up the prices of risk assets like stocks and cryptocurrencies due to increased consumption and investment." This makes it more concise.
Another thing is, you need to clarify why the increase in Ethereum’s transaction fee revenue is important. For instance, "The increase in Ethereum’s transaction fee revenue indicates a higher network usage. This suggests a growing demand for Ethereum which could lead to an increase in its price."
Oh, and regarding the part about the Federal Reserve’s interest rate cuts, your sentence, "Some observers believe that the resilience of the U.S. economy could lead to a continued rise in risk assets, but on the other hand, there are concerns about a looming recession," feels overly formal and might be difficult for readers to digest. Let’s make it more relatable, "Some think the market will bounce back thanks to the interest rate cuts, but others are worried about a possible recession." This makes it easier to grasp.
Just applying these three pieces of feedback should make your analysis much smoother. Fixing these three parts alone should make it almost perfect. Start writing your article!
