On Friday (September 13), Bitcoin surged and then fluctuated at the level of $58,000. Bulls held the integer mark tightly. Dogecoin fell slightly after touching $0.1032. Billionaire Elon Musk tweeted again, suggesting that he would join the U.S. government efficiency committee. The abbreviation D.O.G.E boosted the meme coin. The Federal Reserve will release its September resolution next week, and the pricing of a 25 basis point interest rate cut supports cryptocurrency buying.
Former U.S. President and Republican presidential candidate Donald Trump said he would appoint billionaire Musk as chairman of a government efficiency commission if he wins the U.S. presidential election in November.
Musk, known as the "father of Dogecoin," wrote on Thursday: "Department Of Government Efficiency."
Its abbreviation D.O.G.E. boosted Dogecoin buying.
Musk wrote on Twitter last weekend: "Department of Government Efficiency." The post attracted more than 80 million views. The picture showed Musk sitting at the desk of D.O.G.E., the full name of the abbreviation is Department of Government Efficiency, which is the U.S. Government Efficiency Committee.
IntoTheBlock data shows that currently 70% of Dogecoin holders are in a profitable state, of which 62% of Dogecoin are in the wallets of large holders, and transactions exceeding US$100,000 per day have increased from 158 to 179.
Bezinga pointed out that on the simple moving average (SMA) chart, the 200-day SMA price of $0.14 for Dogecoin is above the 50-day and 100-day SMA price levels. This usually means that the long-term trend of the asset is quite weak. It can signal the end of the previous uptrend and the beginning of a potential downtrend.
The latest data released by the U.S. Bureau of Labor Statistics on Thursday showed that the U.S. Producer Price Index (PPI) increased by 1.7% year-on-year in August, lower than the market expectation of 1.8%, hitting a new low since February this year; the previous value was also revised down from 2.2% to 2.1%. Following the data of the Consumer Price Index (CPI), it further showed that U.S. inflation was slowing down.
At the same time, the number of initial jobless claims in the United States in the week ending September 7 was 230,000, slightly higher than market expectations.
The value was revised from 227,000 to 228,000, but the overall change was not large.
In response to the economic data, Paul Ashworth, an analyst at Capital Economics, an economic research institution, pointed out that PPI once again provided evidence for the Federal Reserve to start cutting interest rates next week. "As expected, PPI increased by 0.2% month-on-month last month, while the growth rate in July was revised downward."
However, the analyst also pointed out that combined with Wednesday's CPI data, the possibility of a sharp interest rate cut by the Federal Reserve is not high.
"Combined with CPI, PPI data suggests that the Fed's preferred core PCE rate will rise modestly by 0.14% on a monthly basis. The Fed is expected to cut interest rates by 25 basis points next week, and their threshold for a significant rate cut remains high."
QCP Capital pointed out that based on the combined CPI and PPI data, the probability of the Federal Reserve cutting interest rates by 25 basis points has climbed to 85%, the highest level in nearly a month.
The rebound in Bitcoin shows that bullish sentiment is relatively dominant in the market, which can be concluded from the fact that investors continue to bet on call options in October and December.
However, apart from the expectation of the Fed’s rate cut and the impact of the US election, there may be no fundamental factors affecting Bitcoin in the near term, so the volatility of Bitcoin will decline until the dust settles.
Bitcoin volatility fell 12% this week, driven by the CPI release and the presidential debate. With no major overall economic events in the short term, the market generally expects volatility to decline ahead of next week's FOMC meeting.
Bitcoin Technical Analysis
Cryptocurrency analyst Daan Crypto Trades assesses the current state of the Bitcoin market and sheds light on Bitcoin's historical performance trends in September. Despite the common belief that Bitcoin tends to face challenges in September, Daan assesses that whether at the beginning of a bullish trend, late in previous market cycles, or even in a bearish phase, September usually marks a local bottom, followed by an uptick in the fourth quarter.
Recently, Bitcoin has experienced two significant declines, especially on August 5, when Bitcoin fell by nearly 25% and the price once fell to US$49,000.
Subsequently, there was another retracement on September 6, which saw the price drop to $52,000. However, amid these fluctuations, Bitcoin has shown resilience and is trading at $58,360, indicating strong support at the macro ascending trendline.
Furthermore, Daan Crypto Trades highlights that a significant portion of Bitcoin’s liquidity remains at elevated levels. This observation is consistent with the sharp price drop in early August that effectively cleared the historical levels of the past six months.
The analyst highlighted key levels to monitor and stressed the importance of breaking through the $65,000 mark. A break above this level would mean the formation of a local higher high, potentially paving the way for a liquidity target of $70,000.
