For no apparent reason, Bitcoin (BTC-USD) bounced quickly from a $19,000 low on September 6. BTC buying intensified on Sept. 9. Nasdaq’s rally to the 50-day simple moving average is a potential catalyst.
BTC still has a high dependency on the technology index. Conversely, crypto traders pointed instead to the upcoming proof of stake or Ethereum 2.0 date for the BTC’s 10% rally (7.8% on the week). Both events are the reason for Bitcoin’s bounce.
The US dollar’s small drop also pushed BTC prices higher. Markets randomly decided to give the British Pound and Euro a lift. Speculators bet that the USD rally is due to pause. This is potentially misguided. Markets are probably pricing in the Federal Reserve’s rate hike on Sept. 21, 2022. Chances are high that the Fed will follow the Bank of Canada and the European Central Bank in raising rates by 75 basis points.
The Fed might choose 50 bps. However, by coming in below two other central banks, it would look weak. The Fed will digest the consumer price index figures first. Despite CPI falling, much of that fall is due to oil prices. Natural gas, electricity, and food prices are still very high. Demand relative to limited supply will keep inflation at high levels.
