Crypto Rally Pauses with BTC Price Near October Highs

13 Oct 2021 · 3rd Party Analysis

Vector of Bitcoin stack of coins with one slipping suggesting a small drop over a candlechart background. Crypto Rally Pauses with BTC Price Near October Highs

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In Summary

  • Bitcoin has consolidated near $55,000 for the past seven days as the crypto rally takes a pause
  • Prospects for the digital asset market remain bright, BTC up 30% so far this month

Cryptos Take a Pause, Bitcoin Slightly Lower

The cryptocurrency market is taking a breather on Wednesday. After a strong upside swing since early October, digital assets were slightly lower to start the day.

The price of bitcoin, the largest crypto, pulled back to a session low of $54,500 per coin. As the day progressed, the leading token rebounded and hovered near the $55,000 milestone.

The decline in cryptocurrency prices on Wednesday follows a largely positive performance so far in the month. Since Oct. 1, bitcoin gained more than 30% to reach a monthly high of nearly $58,000. At that time, it hovered just about 12% away from its all-time record of $64,800.

However, since yesterday, the massive buying momentum has been showing signs of a slowdown. That said, market participants remain committed to the projections for a new all-time high during this quarter.

In more detail, crypto supporters rely on the recent wave of institutional backing and positive signals from US policymakers.

Institutions Await Clear Regulations Before Joining

In practice, growing support from mainstream investment banks, coupled with an upbeat outlook, has boosted the valuation of digital assets. Moreover, the Securities and Exchange Commission is looking for ways to introduce rules over crypto. These rules, analysts say, are likely to be crypto-friendly as lawmakers in Washington made it clear they will not ban bitcoin.

With that in mind, once regulations arrive, the crypto community expects major Wall Street players to join the rally. Besides investment banks, many hedge funds and money managers await regulations over crypto so they could participate in the crypto frenzy.

Dive Deeper in the Financial World

In the meantime, the financial markets on Wednesday are awaiting key reports from the US. More precisely, consumer inflation for September will be in focus. As a result, increased volatility could be expected in the movement of the US dollar. In addition, gold prices could see more pronounced swings in either direction.

Also, the US Federal Reserve is set to release the meeting summary from the last gathering of Fed officials. The report is expected to hold key insights into the central bank’s framework for the foreseeable future. Namely, a time horizon for scaling back the extraordinary monetary support. To this end, Fed authorities have supported the US economy and markets with as much as $120bn in monthly stimulus.

As a result, stocks have been reaching record highs throughout the first nine months of the year. However, the lofty valuations of stocks have been knocked this month as investors brace for an uncertain outlook.

Economic News Today (EST time)

The consumer-price index report for the US economy is set to arrive at 08:30 am. Afterwards, the FOMC minutes will be published at 02:00 am. Later, at 10:00 pm, Australia will report its employment change for September.

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