Bitcoin’s price has been swinging between $61,000 and $62,000 following a stronger-than-expected US jobs report for September. The U.S. economy added 254,000 jobs, surpassing Wall Street’s estimate of 147,000. The unemployment rate dropped to 4.1%, while wage growth increased to 4.0% from 3.8% in August.
This solid report has prompted traders to reduce bets on a larger 50bps rate cut by the Federal Reserve in November. Instead, money markets are now pricing a 95% probability of a 25bps rate cut, according to the CME Fed Watch Tool.
The data suggests that the Fed may achieve a soft landing for the economy—controlling inflation without triggering a recession. Although a slower pace of rate cuts is expected, substantial reductions are anticipated in late 2024 and 2025, which could benefit risk assets like Bitcoin.
Despite the positive economic outlook, Bitcoin is still down 6.6% since the start of the week. The key question is: Will Bitcoin rebound?
What’s Next for Bitcoin?
Geopolitical tensions, particularly Israel’s expected retaliation against Iran following a missile attack, are clouding market sentiment. A potential conflict in the Middle East could disrupt global oil supplies, posing significant risks to the economy and risk assets like crypto.
Without these geopolitical risks, the strong U.S. economic data could have driven Bitcoin toward $70,000. However, the escalating tensions may dampen the anticipated “Uptober” surge. Currently, Polymarket users assign a 25% chance that Bitcoin will hit $70,000 this month, compared to a 42% chance of it falling to $55,000.
Standard Chartered also predicted a short-term dip below $60,000 but encouraged investors to buy the dip.
Long-Term Outlook for Bitcoin
While geopolitical events can shake the market in the short term, long-term drivers like a global monetary policy easing cycle could push Bitcoin to new highs by late 2024 or 2025. This aligns with Bitcoin’s historical patterns of post-election and delayed post-halving rallies.
Although October may remain volatile, Bitcoin could still approach the $100,000 mark in the coming quarters.
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