Bitcoin nears $60.000, but traders brace for potentially bearish September
Bitcoin’s price neared $60,000 on September 3, buoyed by a late surge that resulted in a 3.2% daily gain. Despite this early optimism, traders remain cautious about September, a month historically known for being challenging for both Bitcoin and other assets like gold.
Data from Cointelegraph Markets Pro and TradingView showed promising price action as Bitcoin climbed to a high of $59,800, even though the U.S. market was closed for a holiday. Popular trader Skew noted that Bitcoin’s continued upward movement would require certain technical confirmations, including a four-hour relative strength index (RSI) reading above 50. At the time, the RSI was just below this threshold, signaling potential volatility ahead.
Traditionally, September has been a “red” month for Bitcoin, often leading to declines. However, some market participants speculated that this September could defy expectations, potentially setting the stage for a stronger-than-usual performance. Daan Crypto Trades, another prominent trader, suggested that an exceptionally strong September could lead to a more volatile and less predictable Q4.
Michaël van de Poppe, CEO of MNTrading, echoed this sentiment, noting that the current “dull market” conditions might be a precursor to significant bullish activity later in the year.
In addition to Bitcoin, gold also faces challenges this September. QCP Capital, in its latest market bulletin, pointed out that gold, which hit a new all-time high in August, might decline alongside crypto.
Historically, September has been bearish across various asset classes, including bonds and gold, but October has often marked a turnaround, particularly for Bitcoin, which has averaged a 22.9% gain in eight of the last nine Octobers.
QCP Capital advised that if historical patterns hold, it might be wise to accumulate Bitcoin during any September dip and consider taking profits in October or toward year-end.
Source: Cointelegraph
Bank of Japan governor signals further rate hikes, yen strengthens as bitcoin falls
Bank of Japan (BOJ) Governor Kazuo Ueda signaled the possibility of further interest rate hikes if the Japanese economy and inflation align with expectations. Ueda’s remarks, delivered in a document to a government panel led by Prime Minister Fumio Kishida, underscore the BOJ’s shift from its long-standing ultra-loose monetary policy. Despite a recent rate increase in July, which was the first in decades, inflation-adjusted interest rates in Japan remain negative, indicating the economy’s accommodative stance.
This potential tightening of monetary policy by the BOJ contrasts sharply with the anticipated easing from other major central banks, such as the U.S. Federal Reserve, which is expected to begin cutting rates soon. This divergence could lead to a stronger yen as investors might favor the Japanese currency over others, including the U.S. dollar. The appreciation of the yen could have significant implications for global markets, particularly for risk assets like cryptocurrencies.
Ueda’s comments caused the yen to strengthen, with the USD/JPY pair falling from 147 to 145.85. This movement also led to declines in futures tied to the S&P 500 and a 0.4% drop in Bitcoin, which fell to $58,920. The unwinding of the yen carry trade — a strategy where investors borrow yen at low interest rates to invest in higher-yielding assets — has already caused volatility in global markets, including a notable drop in Bitcoin from $70,000 to $50,000.
The BOJ’s tightening policy, combined with other central banks’ rate cuts, reduces the interest rate differential, which could pressure traders to unwind carry trades further. This situation might trigger additional market disruptions unless central banks resort to measures like expanding their balance sheets, effectively increasing money supply.
Source: Coindesk
Qatar unveils comprehensive digital asset framework to boost crypto innovation
The Qatar Financial Centre (QFC), a special economic zone in Doha, has introduced a comprehensive regulatory framework for digital assets, titled the “QFC Digital Assets Framework 2024.” This new framework aims to enhance regulatory clarity and establish a robust legal foundation for cryptocurrency activities in the region, reflecting Qatar’s growing focus on digital asset innovation.
The framework covers key aspects of digital asset management, including tokenization, property rights related to tokens, custody arrangements, and the processes for transfer and exchange. It also introduces legal recognition for smart contracts, aiming to build a trusted technological infrastructure that fosters confidence among consumers, service providers, and industry stakeholders. This move is seen as a significant step towards positioning Qatar as a leader in financial and capital market innovation in the region.
The framework was developed following extensive consultations with an advisory group of 37 domestic and international organizations, underscoring the inclusive approach taken by the QFC. It is a central element of Qatar’s “Third Financial Sector Strategy,” which seeks to boost the country’s financial sector’s competitiveness and innovation.
In line with its push for cryptocurrency innovation, the QFC has already welcomed over 20 startups and fintech firms into its Digital Assets Lab, launched in October 2023. This lab serves as a hub for developing and commercializing crypto asset products.
Located in Doha, the QFC is an “onshore business and financial center” that offers a favorable environment for businesses, including 100% foreign ownership, full repatriation of profits, and a competitive 10% corporate tax rate on locally sourced profits. Following the framework’s release, companies can now apply for licenses to operate as token service providers within the QFC. This regulatory advancement marks a significant milestone in Qatar’s ambitions to lead the region in the digital economy.
Source: The Block