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Bitcoin, Ethereum, Dogecoin Spike On Fed Pivot Hopes: Apex Crypto Poised To Remain Stuck 'In Consolidation Pattern,' Says Analyst

Major coins were buoyant on Monday evening as the global cryptocurrency market cap rose 2.6% to $945 billion over 24 hours leading up to 8:08 p.m. EDT.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD 3.5% 2.3% $19,648.91
Ethereum ETH/USD 3.9% -0.6% $1,326.04
Dogecoin DOGE/USD 2.9% -0.8% $0.0604
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Quant (QNT) +8.45% $140.08
Maker (MKR) +8.15% $815.36
Elrond (EGLD) +7.9% ​​$52.05

See Also: Best Crypto Debit Cards

Why It Matters: Cryptocurrencies rose along with other risk assets like stocks on Monday, as the S&P 500 and Nasdaq ended their respective sessions 2.6% and 2.3% higher. At the time of writing, U.S. stock futures were slightly in the green.

On Monday, the ISM manufacturing purchasing managers index (PMI) fell unexpectedly to 50.9 compared to 52.8 in the previous month. Analysts were expecting a reading of 52.2. 

On ISM numbers, Edward Moya, a senior market analyst with OANDA, said, “Fed tightening is working and starting to impact more parts of the economy.”

“Bitcoin is slightly higher as risky assets rally following a global collection of weakening manufacturing data that support the idea central banks won’t have to remain as aggressive with the tightening of monetary policy,” said Moya, in a note seen by Benzinga.

“Bitcoin has outperformed equities over the past couple of weeks, so today’s strong stock market moves should not come as a surprise. Despite some signs of downward pressure on inflation, Bitcoin is still poised to remain stuck in a consolidation pattern.  

Moya said, “Calls for a Fed pivot are premature and that should put a cap on how high risky assets rebound here.”

Michaël van de Poppe sees crucial resistance between $19,600 and $19,750 for Bitcoin. Should the apex coin break the resistance it could touch $20,100 and $20,700 next. 

“​​For longs, $19,300 is the perfect area to look for, but scaling in a bit higher wouldn’t be stupid,” said the cryptocurrency trader.

Meanwhile, the correlation between Bitcoin and Gold has hit its highest level in over a year, according to a note from Kaiko Research.

The cryptocurrency market data provider said that over the past year Bitcoin has remained uncorrelated with gold, with a correlation oscillating between negative 0.2 and positive 0.2.

Bitcoin’s Correlation With Gold — Courtesy Kaiko Research

“As the U.S. Dollar continues strengthening, negatively impacting both crypto and gold, the correlation between the two assets has shifted.”

Gold is down nearly 10% on a year-to-date basis, while Bitcoin has declined 58.8% in a similar period.

The dollar index, a measure of the strength of the greenback against a basket of six currencies, is looking “relatively weak,” said Justin Bennett, a cryptocurrency trader. At the time of writing, the dollar index was down 0.05% at 111.69.

He tweeted it gives stocks and cryptocurrencies “room to breathe.”

Bitcoin’s hashrate has reached a new all-time high in September with the backdrop of a raging bear market, according to Glassnode.

The on-chain analysis firm said in a blog post that the hashrate touched a record high of 242 exahash per second. The hashrate is a reference to the computing power used by Bitcoin’s network to process transactions.

Bitcoin’s Mean Hash Rate — Courtesy Glassnode

“To give an analogy for scale, this is equivalent to all 7.753 Billion people on earth, each completing an SHA-256 hash calculation approximately 30 Billion times every second. These are extraordinarily large numbers,” said Glassnode.

The increase in hashrate was credited to “more efficient mining hardware coming online and/or miners with superior balance sheets having a larger share of the hash power network” by Glassnode.

Pointing to an indicator known as Hash Ribbon — which signals the health of the Bitcoin network, Glassnode said, “Almost all historical hash-ribbon unwinds have preceded greener pastures in the months that followed.”

Bitcoin Hash Ribbon — Courtesy Glassnode

Bitcoin supply continues to move away from exchanges — a sign Santiment construed as traders being content with their current holdings. 

“With less than 9% of $BTC on exchanges for the first time since 2018, it is a good bode of confidence for bulls,” said the market intelligence platform on Twitter.

Read Next: SEC Fines Kim Kardashian For ‘Unlawfully Touting’ Crypto Security: Here’s How Much It’ll Cost Her

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