Why Is Bitcoin (BTC) Price Pumping Today

by

As an analyst with over two decades of experience in financial markets, I have seen my fair share of market fluctuations and trends. The recent surge in Bitcoin’s price to $64,955 is not just another bull run, but a testament to the maturity and resilience of the crypto market.

The cost of Bitcoin peaked at $64,955 following a particularly clear indication from Federal Reserve Chair Jerome Powell about potential interest rate reductions. This bullish prediction sparked a surge in the overall cryptocurrency market, causing its total value to increase by over 4%, reaching approximately $2.27 trillion.

The popular cryptocurrencies like Ethereum (ETH), Solana (SOL), Ripple (XRP), Dogecoin (DOGE), along with other key ones, experienced a substantial recovery due to the surge in positive sentiment across the crypto market. In a single day, the Crypto Fear and Greed Index bounced back from fear (34) to greed (56).

Reasons Why Bitcoin Price Is Going Up Today

As an analyst, I’ve noticed a significant surge in Bitcoin’s price this month, as bullish sentiments have been intensely focused on the $62,000 level. In just the past 24 hours, we’ve seen a robust 5% uptick, pushing the BTC price close to the $65,000 mark. Here are the top five reasons I believe Bitcoin’s price is climbing and could potentially hit a new all-time high in the upcoming months:

Sentiment Rebound Following FOMC and Jackson Hole Event

The increase in Bitcoin’s price can be attributed primarily to optimistic signs about potential interest rate reductions from the Federal Open Market Committee (FOMC) Minutes and remarks made by Fed Chair Jerome Powell at the Jackson Hole Symposium, which suggested a possible decrease in federal rates.

The optimistic remarks made by Fed officials like Neel Kashkari, Alberto Musalem, Raphael Bostic, and Mary Daly, along with their endorsement of initiating Federal Reserve rate reductions earlier this week, have prompted a cautious surge of investment purchases. Additionally, they concur that potential rate cuts could commence as early as September.

Powell hinted at a shift in monetary policy strategy due to the decrease in inflation rates and a worsening job market in the U.S. However, he didn’t specify when or how much the interest rate cuts would be. Instead, he mentioned that the decision on timing and speed of rate adjustments will depend on new data, changing circumstances, and an assessment of risks.

Bitcoin Chart Flashes Technical Strength

Why Is Bitcoin (BTC) Price Pumping Today

The graph of Bitcoin’s price shows robust technical power, with various signals suggesting it could be a good time to buy. At present, the Bitcoin market value is higher than the support level of around $62,000. However, it is encountering resistance near $65,000.

In simpler terms, during regular trading hours, Bitcoin’s current price surpasses its 50-day moving average (blue line), along with both its 100-day and 200-day moving averages (red lines). Traders anticipate the formation of a ‘Golden Cross’ pattern in the near future. This occurs when the 50-day moving average moves above the 200-day moving average, which could potentially signal a prolonged bullish trend for Bitcoin.

Bitcoin Options Target $100K By Year-End

At the moment, the price of Bitcoin is hovering above $64,000, which is about 12% below its record high of $73,750. Traders who deal in options are very optimistic about Bitcoin and anticipate more growth towards $100,000 by the end of this year.

Data from Deribit indicates that traders are aiming for Bitcoin’s price to reach up to $100,000 by December’s end. Specifically, the largest BTC options order on Deribit today involved selling 80,000 call options and 120,000 call options for year-end.

As an analyst, I’m observing that approximately 60,477 Bitcoin options with a total value of $3.88 billion will expire on August 30th. The ‘max pain point’, a term used to denote the price level at which option sellers experience the least financial pain, is currently set at $61,000. This suggests that there’s an expectation for Bitcoin prices to recover by the end of this month, potentially due to the commencement of interest rate cut cycle.

Why Is Bitcoin (BTC) Price Pumping Today

Initially, Federal Reserve interest rate reductions might spark market instability across stocks and cryptocurrencies. This could lead to a significant reorganization of market positions, much like what has been observed during other significant historical events.

Positive Shift in US Elections Fuels Bitcoin Price

Pro-Bitcoin Robert F Kennedy Jr has officially dropped out of the presidential race. He has now endorsed Republican presidential nominee Donald Trump. This has led to a significant shift in support for Trump, including after he said to offer a top job to Elon Musk after the elections.

Currently, Donald Trump holds the lead over Democratic presidential nominee Kamala Harris in the Polymarket prediction market. This shift has been influenced by a change in the odds: Trump’s chances of winning the election have risen 1% to now stand at 50%, while Harris’ odds have increased by 1% to 49%. This upward trend is attributed to Robert F. Kennedy Jr.’s withdrawal from the race. Meanwhile, Bitcoin’s price seems to be following an ascending trend as well.

Why Is Bitcoin (BTC) Price Pumping Today

Spot Bitcoin ETF Inflow Support Upside Momentum

Spot Bitcoin ETF saw $252 million in net inflows on Friday, according to Farside UK data. This brings the weekly total to $506.4 million, with consecutive inflows for seven days. This helped Bitcoin price to hold above $60,000 this week.

1. A steady stream of investments indicates a high level of trust among both institutional and individual investors in the U.S. market, as they view Bitcoin ETF flows as a key indicator of overall market sentiment. Notably, BlackRock reported inflows totaling $86.8 million in their BTC ETF, while Fidelity recorded inflows amounting to $64 million in their own BTC ETF.

Read More

2024-08-24 12:32