The crypto market has been experiencing intense volatilty after the recent $19 billion liquidations that took place between October 10-11. The general crypto market is down by 1.8% in the past 24 hours, with a market cap of $3.78 trillion.
However, optimism must remain in the industry due to a few bullish catalysts that will support a market reversal.
US Fed to End QT Soon
Recent reports revealed that the US Fed Chair, Jerome Powell, said that the country's economy is now on "firmer footing" and a QT end is in view.
He explained that the end of the central bank's lengthy efforts to shrink the size of its holdings is coming to an end. This is known as quantitative tightening, a process that has been running since 2022 and was designed to remove excessive amounts of liquidity that the Fed added to financial markets.
Reuters reported that the endgame for QT has been a topic of market debate for some time now, but has been gaining urgency over the recent weeks.
QT translates into bullish signs for the crypto markets.
Upcoming Interest Rate Cuts
On October 14, Powell said that the economy is on a "firmer trajectory" than expected and policymakers will take a meeting-by-meeting approach to any further rate cuts as they balance job market weakness with the fact that inflation is above their 2% target.
Expectations are for two more rate cuts this year, and CME Group data shows that there's a 97.8% chance for a new rate cut at the next FOMC meeting scheduled for October 29.
The current target rate is 400-425 bps, and expectations are for a slash of interest rates at 375-400 bps.
As history has shown, rate cuts also translate into bullish moves for Bitcoin.
Upcoming Crypto ETFs Approvals
The US SEC is expected to approve multiple crypto ETFs, another bullish catalyst for the market. It's also worth noting that the ETF approval only requires an S-1 filing, as the 19b-4 filings have been made obsolete to speed up the process.
Also, the US SEC revealed a friendlier approach to crypto under the current administration in the country.
The approval process has been delayed when the US Government has shut down.
The partial shutdown of the government is now in its 16th day, as the Democrats and Republicans continue their legislative standoff over the budget issues.
USA Today reported earlier that while Republicans hold majorities in both chambers of Congress, they require at least seven votes from the Democrats to pass a funding bill in the Senate.
Elon Musk Recently Supported Bitcoin and Dogecoin
Another bullish catalyst for Bitcoin and crypto is that Elon Musk has recently shown support for Bitcoin via X.
Responding to Zerohedge who said that AI is the "new global arms race and capex will eventually be funded by governments", Musk said that Bitcoin is based on energy, and while governments can issue fake fiat currencies, "it's impossible to fake energy."
Also, Musk said the same thing about Dogecoin.
The Bigger Picture
Also, zooming out the entire Bitcoin price trajectory since its inception, the industry can relax.
In the past 15 years, Bitcoin has become the most profitable asset in history, and the green bull phase of the 2024-2028 epoch has only just begun.
The red bear phase during the Biden era was the longest one, and it was mainly characterized by hunting Bitcoin and crypto companies in every way possible.
However, things are expected to change soon, due to multiple factors, including the ones mentioned above. Bitcoin has recently reached its new ATH above $126,000 on October 6, mirroring immense resilience and strength amidst global adoption.
At the moment of writing this article, BTC is trading above $111,000, seeing a recent price spike after dropping to $109,000 levels.
Despite the recent market collapse, various turbulations, internal/external sabotage, and FUD that have plagued the industry recently, optimism must remain present as we hope for a bullish Q4.
