Yesterday, Bitcoin (BTC) rose more than 6% following Federal Reserve Chairman Jerome Powell’s announcement that they are adjusting policy and hinting at a possible 25 basis point rate cut at the next meeting on September 18. This unexpected news has fueled Bitcoin’s recent volatility, causing prices to swing unpredictably in recent weeks.
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Crucial on-chain data from CryptoQuant provides a glimmer of optimism. According to the data, traders are positioning themselves for further price appreciation.
As the market digests the Fed’s new stance, all eyes are on Bitcoin to see if it could mark the start of a new bullish phase.
Bitcoin data shows market optimism
Bitcoin is trading above $63,000 and gaining momentum as it prepares to break past the critical $65,000 mark.
On-chain data from CryptoQuant shows growing market optimism, highlighting a significant trend that could drive prices higher. Specifically, Bitcoin exchange reserves on centralized exchanges have fallen to an all-time low. Since the end of July, the supply of BTC on the exchanges has fallen from over 2.75 million to approximately 2.67 million, which represents a drop of 3% in just 30 days.
This drop indicates that there is less BTC available for trading on exchanges, which could cause a supply shock, a situation where demand exceeds supply, leading to a potential price increase. As the availability of Bitcoin on exchanges decreases, the likelihood of a price increase increases.
As Bitcoin begins to gain momentum, the market is closely monitoring this trend, potentially pushing Bitcoin into new bullish territory.
BTC Price Action: Next $65,000?
After two weeks of volatility and consolidation, Bitcoin is currently trading at $64,100 at the time of writing, which is above the crucial daily 200 mark. Moving average (MA).
This level is essential for bulls to maintain the uptrend in a higher time frame. For the price to move past the USD 65,000 mark, the price needs to confirm its bullish structure by staying above the USD 57,500 level. Ideally, it is preferable to stay above the daily 200 Exponential Moving Average (EMA), which is at $59,538.
These levels are critical for establishing sustained upward momentum. Staying above it would be a sign of strength in the market, boosting confidence among traders and investors. The data on declining Bitcoin exchange reserves and the central bank’s policy announcement were met with optimism. Investors are increasingly expecting a Bitcoin rally in the coming months, fueled by these bullish indicators.
Cover image of Dall-E, chart from TradingView.