BTC opens high and closes low, the market awaits guidance from PCE data

Financial market volatility continued on Thursday, with asset prices surging after the U.S. market open but moving lower in the afternoon as market watchers await Friday's personal consumption expenditures (PCE) report, which will provide guidance on the pace and depth of the Federal Reserve's interest rate cuts.

According to Bitpush data, Bitcoin stabilized near the $59,000 support level overnight. Bulls began to exert their strength in the early trading, soaring to over $61,000, hitting a daily high of $61,230, and then fell back to near the $59,000 support level. As of press time, Bitcoin is trading at $59,404.38, up 0.36% in 24 hours.

The altcoin market saw mixed gains and losses. Among the top 200 altcoins by market capitalization, LayerZero led the way with a 10% increase, followed by Flare (FLR) and ConstitutionDAO (PEOPLE), with increases of 8.3% and 8.2% respectively. Floki (FLOKI) had the largest drop, down 10.1%; Artificial Super Intelligence (FET) fell 9.1%; and io.net (IO) fell 8.5%.

The current overall market value of cryptocurrencies is $2.08 trillion, and Bitcoin’s market share is 56.2%.

As for U.S. stocks, as of the close, the Dow Jones Industrial Average closed up 0.59%, the Nasdaq fell 0.23%, and the S&P 500 was flat.

The market's pullback in the afternoon coincided with a rise in the U.S. dollar index, which climbed from 100.885 before the early trading to a high of 101.581. TradingView analyst TradingShot said the prospect of a rate cut is expected to lead to a decline in the U.S. dollar index, which is good for asset prices.

The chart below shows a crossover chart analysis between the S&P 500 (SPX) and the U.S. Dollar Index (DXY) since the 2008 housing crisis. TradingShot said that before the widely expected Federal Reserve rate cut next month, it is beneficial to take a multi-year perspective on the impact of the U.S. dollar on the stock market.

The analyst explained: "The US dollar index has been trading in an ascending channel since bottoming out during the housing crisis in 2009. Currently, it is below the resistance trend line of lows (dashed line), and rate cuts should exert more selling pressure and keep it at this level. It still has some way to go before it touches the bottom of the ascending channel again."

He believes that the stock market is at the end of the recovery phase (blue arc) and will enter the expansion phase (green rising channel) at the beginning of next year. Therefore, one or more interest rate cuts by the Federal Reserve will have a huge impact on the S&P 500 index, providing investors with long-term stable opportunities to buy low and sell high within a narrow channel. Bitcoin is also expected to benefit from the correction of the US dollar index due to interest rate cuts.

According to market analyst Rekt Capital, Bitcoin is currently in a re-accumulation phase and is “very close to entering the parabolic phase of the cycle.”

“214 days after the halving is usually when we break out into a new micro uptrend,” he said in a video update on Wednesday. “Technically, we are still more than two months away from breaking out to new all-time highs and really enjoying price discovery.”

Based on past bull market cycles, Rekt Capital said the peak of this bull market should occur around September 2025.

He said: “If you think about how long it takes for Bitcoin to rise to a new all-time high and reach the final bull market peak after the halving, it takes 546 days or 518 days… For example, in 2020 and 2021, it took 546 days after the halving to reach the bull market peak, and in this cycle in 2016-2017, it took 518 days after the halving. So this shows us that it takes 518-546 days after the halving to reach the bull market peak.”

Rekt Capital noted in a follow-up article on Thursday that despite the volatility and pullbacks over the past week, higher time frames still show BTC poised for a breakout in the near future.

He said: “Bitcoin has indeed formed a higher low (light blue) and is sustaining above the weekly level (black; $55,737). In addition, Bitcoin has since formed a base at a higher weekly level (around $58,000), which has acted as confluence support this week. Retests will continue to be successful after Bitcoin rebounds above $60,000. Bitcoin has been forming higher lows since early July.”