As a seasoned researcher with over two decades of experience in financial markets, I’ve seen my fair share of market fluctuations and trends. Today’s Bitcoin rally is reminiscent of the tech bubble of 1999, but with a twist – it’s digital gold instead of dot-com stocks.
In the last 24 hours, Bitcoin‘s price surged by more than 3%, peaking at approximately $61,242 and then pulling back to around $60,400 during the London trading period. On a day-to-day scale, this leading cryptocurrency ended its session above the 50 Moving Average (MA), indicating a renewed bullish trend.
Over the last day, I’ve noticed a 1% increase in the total market capitalization of cryptocurrencies, pushing it towards $2.17 trillion at the time of this writing. This swift crypto recovery amid high volatility has led to forced liquidations worth over $135 million, primarily affecting those who were short trading.
The significant exit of short traders could potentially prolong the positive trend in cryptocurrencies, as it might cause a medium-term short squeeze.
Top Reasons Why Bitcoin Price Leapt Higher Today
Over the last two months, the surge in Bitcoin’s price beyond $61K was gradually building. From a technical perspective, the Bitcoin price has been shaping a reversal pattern on both daily and weekly charts, even as a “death cross” emerged between the 50-day and 200-day Moving Averages (MAs).
Furthermore, the primary cryptocurrency has built up a strong level of resistance around $54,000, leading to a three-point base and an increasing divergence on the Daily Relative Strength Index (RSI).
Looking at the basic structure, it appears that the value of Bitcoin compared to other cryptocurrencies (altcoins) has been steadily increasing. This is supported by the rising dominance of Bitcoin, which recently peaked at approximately 58.46% – a level not seen in several years.
Among large-scale Bitcoin investors, known as “whales,” there’s been a consistently higher interest compared to the broader altcoin market, including Ethereum. According to data analysis from CryptoQuant, Bitcoin storage wallets have shown signs of accumulation over the past six days, which strengthens the overall optimistic forecast for Bitcoin prices.
Whales are accumulating #Bitcoin.
Six days of accumulation alerts in a row. Primarily from custody wallet inflows.
Nothing has changed for Bitcoin; we’re in the middle of the bull cycle.
— Ki Young Ju (@ki_young_ju) September 18, 2024
On Tuesday, there was a significant influx of approximately $186 million into U.S.-listed Bitcoin Exchange-Traded Funds (ETFs). Interestingly, no U.S. Bitcoin ETF issuers recorded a cash outflow on this day, including Grayscale’s GBTC. Although BlackRock’s IBIT didn’t see any inflow on Tuesday, Fidelity’s FBTC, Bitwise BITB, and ARK 21Shares Bitcoin ETF (ARKB) all experienced cash inflows exceeding $42 million each.
Bigger Picture
The cryptocurrency industry has gradually gained bullish momentum as Gold rallied to its all-time high in the past few days. The ongoing global economic shift is expected to be escalated by today’s Federal Funds Rate and the FOMC statement.
According to Coinspeaker’s recent report, there’s a strong possibility that the Federal Reserve could lower interest rates for the first time in four years later today. If this rate cut occurs, it would offer investors an opportunity to access funds more easily, potentially boosting the short-term crypto market liquidity.
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2024-09-18 15:52