Bitcoin (BTC) Price Surge: Reasons Behind the Uptrend and Impact on Altcoins

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Bitcoin (BTC) price has made a dramatic comeback, defying recent struggles and surging by an impressive 6.47% in the last 24 hours. This positive trend emerges amidst a shift in investor sentiment regarding potential monetary policy adjustments by the US Federal Reserve.
The catalyst for this surge appears to be a combination of several factors. Recent data from the US Labor Department shows strong labor market conditions, with unemployment claims remaining steady at 208,000 for the week ending April 27.
This, combined with an increase in the Employment Cost Index, has instilled confidence in investors and led to increased belief that the Fed could adopt a more dovish stance by the end of 2024. Bitcoin rose by 6% following this development.

Bitcoin’s surprising price surge is driven by a combination of strong labor market conditions, potential monetary policy adjustments by the US Federal Reserve, and an increase in the Employment Cost Index.

Why did Bitcoin’s price rise?

This change in expectations is significant. Lower interest rates make fixed income investments less attractive and potentially shift capital towards riskier assets like cryptocurrencies. Data shows that market participants are increasingly betting on this scenario, with the likelihood of the Fed lowering interest rates to below 5.00% by December 18 rising significantly from 40% just a week ago to 61%.

Adjustment in M2 money supply

Fanning the flames is the US M2 money supply, which includes cash, savings, and short-term deposits, showing its first positive adjustment since November 2022. Historically, such increases have coincided with strong performances in the crypto market and potentially signaled a rally. A similar trend is apparent this time.