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Joel Frank
Author
Joel Frank
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Following September’s hotter-than-expected US inflation data, Bitcoin (BTC) consolidated just below $61,000 on Thursday.
The latest Consumer Price Index (CPI) report showed that the year-over-year rate of headline inflation for September reached 2.4%, slightly exceeding the expected 2.3%.
Meanwhile, core CPI, which excludes food and energy prices, came in at 3.3%, just above the anticipated 3.2%.
Both figures are substantially lower than the post-pandemic highs but still exceed the Federal Reserve’s 2% inflation target.
Despite this, Federal Reserve policymakers reacted positively, suggesting that progress toward lowering inflation remains on track.
Fed Moves and Bitcoin Price Struggles in October
Macro traders responded to the latest inflation data by increasing their bets on a Federal Reserve rate cut.
According to the CME’s Fed Watch Tool, markets now imply an 87% chance of a 25-basis point rate cut next month, compared to 80% just a day earlier.
However, this failed to spark a rally in Bitcoin, which remains near its 50-day moving average around $60,000.
Despite the Fed’s first rate cut since 2020—a 50-basis point reduction in September—the Bitcoin price has struggled to find upward momentum.
Fed Chair Jerome Powell has downplayed the chances of additional large rate cuts, and strong economic data, including last week’s jobs report and the CPI release, has pushed back against the likelihood of further cuts.
Additionally, rising military tensions between Iran and Israel have weighed on market sentiment, including Bitcoin.
October, often referred to as “Uptober” due to its historically strong performance for Bitcoin, has so far failed to deliver.
Bitcoin is currently down over 4% this month, leading many to wonder if a price surge is still possible.
What to Expect from Bitcoin in the Coming Months
Several positive factors are emerging that could drive Bitcoin’s price higher later this quarter.
Although the pace and timing of the Federal Reserve’s rate-cutting cycle remain uncertain, financial conditions are expected to ease as long as inflation stays in check.
A robust US economy could provide the necessary support for risk assets like Bitcoin to rally.
Additionally, with the 2024 US Presidential election approaching, speculation surrounding a possible Donald Trump victory has grown.
According to Polymarket, Trump’s chances of winning are increasing, with many seeing him as more favorable toward cryptocurrencies.
His return to the White House could serve as a catalyst for a major Bitcoin rally.
Now that six months have passed since Bitcoin’s halving, bull markets tend to gain traction around this point.
While uncertainty surrounding geopolitics and the election may deter some investors from entering the market in October, the potential for a major rally remains strong as we move into November and beyond.
While Polymarket betting markets currently assign just a 20% chance of Bitcoin reaching $70,000 by the end of October, they estimate a 54% chance that Bitcoin will hit a new all-time high by the end of the year.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
