What seems to be the reason behind this recent increased demand for bitcoins? On Monday, October 7 when the markets were opened, the price of Bitcoin surged. This movement was a combination of several factors, such as employment figures, and changing expectations of the rate cut, among others, in the crypto market. At the time of writing this article, Bitcoin was trading at $62,153.59.
The latest US labor market data have become a significant driver of Bitcoin’s price. The BLS report states that there were 107000 more jobs added. The numbers for September have risen by another 17000 jobs. The unemployment rate also dropped from 4.22 percent to 4.1 percent.
These figures surpassed expectations in a way that suggested the economy could be in better shape than some had indicated. This brought change in expectations as to where the Federal Reserve was headed next. Though markets were expecting a 50-basis-point rate cut at the next FOMC meeting, the new data weakens it and is less likely to be as deep.
Another factor is that Federal Reserve policies are often influential in determining the activity of Bitcoin prices. With inflation gradually moving closer to the 2% target and labour market proving to be relatively robust, the market has lost its expectations of large cuts in interest rates. However, it is currently predicting an 85% chance of a 0.25% rate cut in November FOMC meeting, as per the CME Group’s FedWatch Tool.
The changes in expectation of rate cuts have provided a suitable environment for Bitcoin since investors react to the signalling of rate stability. While rate cuts have been less aggressive in the past year some analysts argue that such a trend could entice investors to turn into more risky and safe haven assets such as Bitcoin.
Bitcoin price also rises because of the overall performance of Bitcoin in 2024. Bitcoin is the highest-performing asset in 2021 to date with an average increase of 49.2 percent by New York-based NYDIG.
Historically, the third quarter of the year has been the most bearish for Bitcoin. However, the recent events look promising. Currently, investors are focusing on the fourth quarter since, on average, Bitcoin is 81.5% bullish, as gathered from CoinGlass.
Reflecting on the future outlook, there is a possibility of a bullish pattern in the final quarter of 2024. According to data, on October 7, Bitcoin rose above $64,000 and changed the market’s trend to higher Quarter returns. Such a move could extend the improvement of the cryptocurrency as the year ends.
Bitcoin trader and analyst Timothy Peterson has made an analysis in which he slavishly estimates that Bitcoin can increase by between 30% to 60% by the last quarter of the year. The renowned Bitcoin trader believes BTC may climb to $100,000 before the end of 2024. It is not unreasonable to attain such figures because records are supporting robust performance in Q4 and at the current pace.
The surge in Bitcoin’s price can be attributed to several key factors: strong employment figures in the United States, shifting rate estimates for the Federal Reserve, and Bitcoin's excellent year in the year 2024. Further increase in the strength of the labor market and approaches inflation target levels could reduce the measures of rate cuts by FED. This has created a right environment for holding Bitcoin because usually, they perform well during the economic turbulence.
The forecast for Bitcoin over time shows that it is poised to go up as it gets into the fourth quarter of the year 2024. Moreover, as institutional demand increases and cryptocurrencies become more recognized in the market, the Bitcoin price may increase and even reach new heights.