Forecasting Crypto Market Growth for September and Q4 2024

It is the SPX and DXY, for now, that are two most essential indices in terms of where BTC prices will head in the next few weeks. In the short term, the S&P 500 recently managed to break out of another lower time frame resistance level. At the time of this writing, the SPX was trading ~1% percent below its all-time high (ATH). This level will prove to be an inflection point SPX into new un a higher probability of a continued bull run favouring “risk-on” assets such as Bitcoin. After all, BTC does tend to march in-step with the broad market action. Conversely, if the SPX failed to follow through and stalls below this crucial level, we could get a glimpse of another potential pullback, which could reduce BTC’s current meteoric rise.

Because the U.S. dollar tends to fall when the broader stock market is falling, linguistic trends that track the latter also provide a helpful lead on BTC’s price. In part because a weaker dollar often bolsters BTC when other markets are ailing – as investors look for safe havens for their funds – investors can learn a great deal by keeping a ‘watch list’ of the DXY, the index that tracks USD value against a basket of major currencies, in addition to the linguistic metrics outlined above. The DXY tends to move in the opposite direction to Bitcoin’s price.

These market calls were made more ambiguous by the Fed’s upcoming meeting and interest rate decision. Market casino-dwellers previously had a 25 basis points (bps) rate decrease priced in at the next Federal Open Market Committee (FOMC) meeting. The probability was about 95 per cent; only a small group of mavericks who believed in a 50 bps rate cut were overruled. But market players started discussing the possibility of a double cut.

A 50 bps rate cut could be interpreted in two ways:

• Economic Concern

  A steeper cut could mean the Fed feels worried about economic risks, causing investors to panic and sell off equities. That might take cryptocurrency down with them.

• Monetary Easing

  On the other hand, a substantial cut could be seen as the Fed preemptively easing monetary conditions, which is likely bullish for the economy and risk assets over the intermediate term.

With a half percentage point cut of this nature not fully priced, it’s possible the actuality of it will induce some volatility. Come what may, there is a realistic outcome where the FOMC meeting could lead investors to take some profits either before or immediately after the range. With the SPX gaining nearly 38 per cent since November 2023, much of which has been fuelled by expectations of rate cuts, a period of consolidation or a shallow correction wouldn’t be a surprise.

While the macroeconomic backdrop sets the stage, Bitcoin's technical indicators offer additional perspectives:

• Bearish Divergence

  Looking at the 4-hour chart, BTC shows a clear bearish divergence with the Relative Strength Index (RSI) The RSI is not overbought so it may be a prelude to little corrections, allowing a retracement to the $56,000 zone, to retest the recent lows.

• Support Levels and Price Channels

  The market price of bitcoin has bounced off the previous critical support level at $55,850. The most recently printed weekly candle also closed above the bottom of a long-standing downtrending channel, hinting a reversal in price.

• Retesting Crucial Levels

  As we speak, BTC is retesting the bottom of the channel as a supply area. We’ll have a much clearer idea if price holds as support. If, in the current session, BTC can successfully retest the bottom of the channel, Bitcoin may regain momentum and break a series of lower lows that have been established going back to July. Once this level is broken, it will be the green light for a new uptrend to enter the channel within it.

• Volatility Ahead

  Investors should get ready for some volatility. When the price makes a retest of the channel bottom, it usually involves large price swings. On a day-to-day basis, these moves look like wicks on a candle, but so long as bullish structure remains intact, a weekly candle closing north of $58,000 will likely only result in a retest of this level.

But with macroeconomic stars and economic keys on the upswing, time to be conservative but bullish.

• Monitor Macroeconomic Events

  Watch the Fed’s interest-rate moves and reactions in the markets. Understand the economic backdrop the data paints. It will explain how it could affect crypto strategies.

• Watch Key Technical Levels

  Keep your eye on Bitcoin’s support and resistance around $56,000 and $58,000, which will likely dictate short-term price action.

• Prepare for Volatility

  Get used to market volatility, and have a plan for how to react to it, especially when there are major economic announcements. Volatility is your friend, because if there’s a lot of movement up and down, a smart investor can capitalise on these swings.

• Long-Term Perspective

  The structural advantage in the higher timeframes indicate that in spite of the short-term uncertainties, the long-term chart for Bitcoin remains as sound as ever. Because of this, investors with long-term exposure may seize the opportunity to find strategic entry points when the market pulls back.

• Thus, in September 2024, as we head into Q4 of 2024, the crypto market will teeter at an inflection point. The labyrinth of old-world markets, as well as actions and monetary policy of central banks, along with ground-level technical price levels, will all be harmoniously interacting with one another. While we will surely see some short-term volatility, the aggregate long-term trends look set for Bitcoin to continue finding a bottom in preparation for new growth. Investors should be prepared, informed and opportunistic as the crypto market adjusts.