Matrixport's latest report reveals a positive forecast for Bitcoin in the fourth quarter of 2024.
According to the report, despite the difficulties encountered in the third quarter, Bitcoin's trading range has gradually narrowed, setting the stage for a potential breakout. The report attributes this optimism to FED interest rate cut expectations, positive seasonal factors and the upcoming US presidential election.
The report states that the Fed left interest rates unchanged. However, FED President Jerome Powell stated that a rate cut may be possible at the September meeting if inflation continues on the predicted path. Matrixport's inflation model also predicts a gradual decline in the Consumer Price Index (CPI) next year. According to the report, the potential for interest rate cuts of a quarter point each over several quarters could provide liquidity and stimulus to risky assets such as Bitcoin.
While current interest rates are 5.25% and the inflation rate is 3%, the difference reflects the FED's restrictive policy. This suggests that the FED could significantly lower interest rates over the next twelve months, which would benefit Bitcoin, according to the report.
Matrixport's report also highlights the seasonal challenges Bitcoin typically faces in August and September. Historically, these months have seen fixed yields and weak performance, likely due to lower trading volumes during the summer holiday period and uncertainty in the market as traders await economic indicators and central bank policy decisions in the fall.
The report suggests that the US presidential elections could bring positive news for Bitcoin. If former President Donald Trump is re-elected, his administration could adopt a more positive regulatory stance toward cryptocurrencies, reducing regulatory uncertainties and encouraging innovation. Trump's recent appearance at the Nashville Bitcoin conference was well received, but he did not announce definitive plans for a Bitcoin reserve.
*This is not investment advice.