The price of Bitcoin put in another positive performance over the last seven days, looking to end the month and start October on an even stronger footing. Continuing its resurgence over the past few weeks, the premier cryptocurrency climbed as high as $66,000 on Friday, September 27th.

Recent data shows that there might be a growing correlation between the performance of the US stock market and the value of the world’s largest cryptocurrency. The question here is — how could this influence the behavior of investors?

How Did Bitcoin And S&P 500 Perform In September?

In a recent post on the X platform, crypto intelligence firm IntoTheBlock revealed the correlation between the Bitcoin price and the S&P 500, one of the most popular stock market indices, has reached its highest point in more than two years. For clarity, the S&P 500 index tracks the performance of 500 of the largest exchange-listed companies in the United States.

The Bitcoin price registered a surprisingly positive performance in September, a month known to be historically bearish for the flagship cryptocurrency. According to data from CoinGecko, the value of BTC is up by more than 11% in the past month.

Source: IntoTheBlock/X

Meanwhile, the S&P 500 index has undergone a quick and strong recovery, printing a new all-time high after an initial slump at the beginning of the month. Data from TradingView shows that the index is up almost 4% in September. 

The relationship between the stock market and the cryptocurrency market has always been intriguing, as investors look to take advantage of opportunities either market offers. Nevertheless, a strong correlation between these two asset classes is deemed to narrow the diversification opportunities they offer to investors.

As of this writing, Bitcoin price stands around $66,024, reflecting a mere 1.1% increase in the past 24 hours. Meanwhile, the S&P 500 Index continues to hover around 5.8K, with a 0.4% rise in the past day.

Global Liquidity Surges By $1.426 Trillion In A Week

Popular crypto pundit Ali Martinez took to the X platform to share that there has been a notable surge in the volume of capital in the global financial markets. Data provided by Martinez shows that global liquidity jumped by $1.426 trillion in the past week.

Global liquidity surged by $1.426 trillion this week, hitting $131.6 trillion. #Bitcoin and other risk assets are gaining, though this liquidity boost could roll over into October. pic.twitter.com/PtFDjkR7wU

— Ali (@ali_charts) September 27, 2024

Bitcoin and other risk assets have been the major beneficiaries of the rising global liquidity, as their values have gained due to the increased capital influx. Martinez also noted that this liquidity boost could roll over into October.

The price of BTC breaks above $66,000 on the daily timeframe | Source: BTCUSDT chart from TradingView

Featured image from iStock, chart from TradingView

The Federal Reserve left the door open for further interest rate cuts, and China has enacted cuts of its own. Bitcoin experts are bullish towards the future, but some uncertainty remains.

The next few weeks will be critical for Bitcoin’s growth.

Rate Cuts Worldwide

Officials from the Federal Reserve are open to further rate cuts. The first round of cuts does not appear to have many outright political opponents, leaving the door wide open for more. As Neel Kashkari, President of the Federal Reserve of Minneapolis, put it:

“Even after the 50 basis-point cut, I believe the overall stance of monetary policy remains tight. I was comfortable taking a larger first step, and then as we go forward, I expect, on balance, we will probably take smaller steps,” he claimed.

The US is not the only major world player to take similar steps. On Monday, China also implemented rate cuts alongside several other measures, such as injecting over $10 billion in liquidity into its central bank. In other words, the economic fallout from US rate cuts is not localized, and the market conditions may only intensify.

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Impact on Bitcoin

For some, this is a concerning possibility. Wall Street strategist Ed Yardeni, for example, was extremely bearish. In an interview, he warned of an “outright melt-up” in the stock market, claiming that there is a slim but non-negligible chance of an economic downturn.

He predicted a roughly 80% chance of a bull market and a 20% chance of downturns. Bitcoin’s own experts are overall more bullish, but some slight reservations do remain.

“Let the good times roll,” Arthur Hayes claimed in an X post, noting that Bitcoin’s price held up over the weekend. This goes against his earlier skepticism that Bitcoin might not profit from cuts. A series of other experts expressed similar bullish sentiments in exclusive interviews with BeInCrypto, albeit with a few caveats.

For example, Harsh Agarwal, Investment Lead at Cypher Capital, noted that “Bitcoin stands to generate $145 billion in gains if it reaches $68,000”. Several bullish factors are aligned, he claimed, but that’s not a guarantee of success. Mithril Thakore, CEO & Co-founder of Velar, described these dynamics further:

“The Fed’s interest rate cut on September 18 appears to have shaken the crypto market from its stupor and given BTC the much-needed catalyst to think about retesting former highs. Before it can get there, though, $64,000 has proven to be a key resistance zone and it remains to be seen whether BTC can convincingly break through this barrier,” claimed Thakore.

In other words, there are plenty of bullish signs, but that doesn’t mean a bull market is absolute. The most critical period for Bitcoin is in the next few weeks, especially now that China has made its own cuts. Jonathan Hargreaves, Global Head of Business Development & ESG at Elastos, told BeInCrypto that this market is unique and may not match up with past cycles.

Read More: How To Buy Bitcoin (BTC) and Everything You Need To Know

“Importantly, the broader economy will be more interconnected with these developments, particularly regarding interest rate cuts and critical regulatory decisions in the US, India and China related to crypto governance. Choices such as aggressive interest rate cuts, taxation policy, and market access in China will significantly impact the peak and duration of this bull run”, Hargreaves told BeInCrypto.

The fourth quarter (Q4) of every four-year cycle has always been historically bullish for Bitcoin (BTC). With Uptober just a week away, a crypto analyst has shared predictions on how high the price of Bitcoin could soar during this typically bullish season.   

Here’s How Far Bitcoin Can Climb In Uptober

In a recent X (formerly Twitter) post, crypto analyst, Jelle shared insights on how the next few weeks would have an impact on the price of Bitcoin. According to various analysts, the month of September is seen as a historically bearish period for BTC, characterized by volatility and severe price declines. However, in the crypto market, a prolonged bearish period often precedes a breakout. 

With September wrapping up, the highly anticipated Uptober is set to begin. The term “Uptober” was coined by many within the crypto community to describe the typical upward pricing pattern seen during October. Jelle has pointed out that in the previous two bull cycles, during the volatile “summer chop fest seasons,” Bitcoin’s price had broken out two to three weeks after the start of Q4, which begins in October. 

Based on this recurring bullish trend, the analyst has suggested that a similar price breakout might occur for Bitcoin within a few weeks of October. Jelle shared a detailed chart of BTC’S price movements from 2020 till date, pinpointing the cryptocurrency’s next price target. 

He predicted that Bitcoin’s price could surge as high as $150,000 in October. For this significant price increase to occur, Bitcoin would need to rise about 135% from its current price of $63,817 as of writing. 

Sharing a similar sentiment, a crypto analyst known as ‘Altstein Trade,’ disclosed that October is a pivotal month for BTC and with historical patterns in mind, the market might see some exciting possibilities. He added that if Bitcoin can push through the chop fest season, the anticipated breakout in Q4 could set the stage for new highs.  

In a previous post, Jelle also revealed that BTC was presently on track to witness the strongest September performance in history. He disclosed that if the cryptocurrency can close September in the green, Q4 of 2024 could be very promising, with the strong likelihood of October, November and December being significantly bullish. 

BTC Fractal Patterns Hint Repeat Of Last Year’s Uptober

Bitcoin expert and analyst, Kaleo has drawn parallels between Bitcoin’s price action and performance in the last year to the current trends observed in September 2024. Kaleo pointed out that September 2023 marked a bottom for Bitcoin, however, the cryptocurrency experienced an upward momentum at the end of September, extending to December.  

As a result, the analyst remains optimistic about Bitcoin’s future outlook, expecting the cryptocurrency’s price action to play out based on historical bullish patterns in Q4. Based on his price chart, Kaleo projects that BTC could potentially witness a price surge to $112,000.   

Featured image created with Dall.E, chart from Tradingview.com