Bitcoin and other cryptocurrencies are continuing to rise amid growing expectations of an interest rate cut from the Federal Reserve, strengthening the market.
Historical correlation points to Bitcoin's rise
According to analysts at CF Benchmarks, Bitcoin is currently trading below its fair value range relative to US M2 money supply growth. Experts note that the difference between M2 growth and Bitcoin's price is the highest since August 2024, potentially creating favorable investment conditions.
Analysts indicate that historically such divergences between M2 and Bitcoin prices have resulted in significant price increases.
> "Over the last decade, BTC has shown a positive correlation with M2, with M2 monetary growth typically lagging the price by about three months. If this historical correlation continues, Bitcoin could also see liquidity support rise later in the fourth quarter." CITE_NA
Bulls haven't won yet
Despite positive forecasts, FxPro chief market analyst Alex Kuptsikevich pointed out that bulls still need to hold key levels. He emphasized that Bitcoin is currently in a battle at the $112,000 level, while the $115,000 level is crucial for any further rise.
> "Bitcoin continues to attract buyers on intraday dips, forming a soft and rather fragile uptrend, with the main challenge currently around $112,000. The real test is around $115,000, just above the 50-day moving average. Staying above this level could signal a return to the uptrend, but for now, BTC is lagging behind record-high stocks." CITE_W_A
Current prices and influencing factors
Currently, Bitcoin has risen above $114,000, while Ethereum (ETH) has reached $4,400, and XRP is valued at $3. Dogecoin (DOGE) has also shown growth, reaching $0.25 with a 5% daily increase and a total gain of 15.9% over the past week.
Overall, the rise of Bitcoin and other altcoins amid anticipated interest rate cuts suggests a possible strengthening of the crypto market. However, it is essential to consider technical resistance levels and recent trends in financial indicators.
