Last week, the cryptocurrency market showed moderate growth. Bitcoin surged 3.2% to $65,602, while Ethereum advanced 2.9% to $2,657. The key driver was the Fed's decision to cut interest rates by 50 bps on September 18. This caused the dollar to weaken in the global FX market and increased investors’ interest in risk-sensitive assets.
The S&P 500 hit an all-time high, exerting a positive impact on the cryptocurrency market. In addition, US PCE inflation data for August came in lower than expected at 2.2% instead of the projected 2.3%, raising expectations for further easing of the Fed's monetary policy. Bitcoin approached the upper bound of the long-term channel at $69,300, creating tension in the market.
Over the coming week, investors will focus on Fed Chair Powell’s speech on Monday and the release of several key US macro data points, including non-farm payrolls and the ISM business activity index.
Market participants will continue to track bitcoin as it moves towards $69,300 along with the possible reaction to an attempt to break out of this level. The cryptocurrency community eagerly awaits the outcome of the US presidential election, looking for the new administration to set clear rules of the game for the regulation of cryptocurrencies, which could lend additional support to the market.
Sellers broke through the $65,400 support level during Asian trading on Monday. The pullback stopped at $64,190. Bitcoin has closed higher for four consecutive weeks, so a correction could be in the cards. Buyers still need to close the day above $65,400 in order to extend gains up to $69,300.