This Week’s Impact on Bitcoin
This week is crucial for Bitcoin (BTC) as there are several key events that will have an impact on its price. Firstly, the Federal Reserve (Fed) will announce its decision on interest rates. Secondly, important data about the American labor market will be released. Lastly, the next season of financial results will begin.
Despite geopolitical uncertainty and increasing US Treasury yields affecting stock markets, Bitcoin has performed remarkably well.
October’s Positive Performance
Last week, Bitcoin reached a close of $34,525, marking its highest weekly close in 550 days. The potential approval of a Bitcoin Exchange-Traded Fund (ETF) could significantly influence its future price. In contrast, the S&P 500 experienced a 3.5 percent decline in October and a 10% drop compared to its peak in July.
The growth of Bitcoin also depends on the yield of US treasury bonds. Last week, the yield on 10-year US treasury bonds surpassed 5% for the first time in 17 years. Further increases may occur with strong data from the US labor market.
Potential Interest Rate Increase
After the Federal Open Market Committee (FOMC) meeting on Wednesday, the US central bank will announce its decision on interest rates. Market estimates suggest a nearly 100% chance of no increase. However, last week’s revelation of 4.9% economic growth in the US for Q3 2023 indicates a strong labor market that may lead to higher interest rates in the long term.
While higher interest rates aren’t necessarily favorable for Bitcoin, the approval of BlackRock’s spot Bitcoin ETF could offset this impact.
The Importance of Wednesday
This week, all eyes should be on Wednesday. If the Fed surprises with a different decision than expected, Bitcoin’s price could become highly volatile. Additionally, the employment report on Friday should be closely monitored for further insights.
Hot Take: Bitcoin’s Resilience and Uncertain Future
Despite external pressures, Bitcoin has shown resilience with its positive performance in October. However, its future growth will depend on various factors such as interest rates and economic indicators. The approval of a Bitcoin ETF could bring significant changes to its price trajectory. As the week unfolds, it is crucial to stay informed about the decisions made by the Federal Reserve and the state of the labor market. These factors will shape Bitcoin’s path in the coming days and potentially introduce high volatility.
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