Key Points
- Bitcoin’s price surged to a significant resistance level of $64,000 due to optimistic investor sentiment following a dovish interest rate decision.
- Bitcoin’s bullish momentum is being fueled by institutional investors, countries, and MicroStrategy’s continuous acquisition of coins.
Bitcoin’s value recently escalated to a pivotal resistance level, a result of a boost in investor risk appetite following a dovish decision on interest rates.
Bullish Catalysts for Bitcoin
Bitcoin (BTC) reached the critical mark of $64,000 for the first time since August 9. This significant jump, over 20% from its lowest point this month, indicates a technical bull run.
The price increase is primarily attributed to the Federal Reserve’s decision to cut rates by 50 basis points on Wednesday, with hints of further cuts later in the year.
The rise was further fueled when the Bank of Japan decided not to alter interest rates, despite the country’s inflation rate remaining high. This decision prevented a potential Japanese yen carry trade unwind, which had previously caused a downward trend in most assets in August.
Institutional investors and nations have maintained their Bitcoin and ETF purchases. The net Bitcoin ETFs over the last five trading days exceeded $567 million. MicroStrategy’s ongoing acquisition of coins has resulted in it holding over 252,000 coins, yielding an unrealized profit of over $5.95 billion.
El Salvador’s government currently possesses 5,800 coins and continued its accumulation this week. Bhutan, on the other hand, holds coins worth over $800 million, a significant amount considering its GDP of $3 billion.
Bitcoin’s value also increased as the fear and greed index shifted from the fear zone to a neutral area of 46. Cryptocurrencies usually perform well when this index is on the rise.
Bitcoin Reaches Key Resistance
On the daily chart, Bitcoin has hit a critical resistance level at $64,000. This price coincides with the descending trendline that links the highest swings since June 7. It faced substantial resistance in its previous attempts to cross this level in July and August.
Consequently, there’s a risk that the coin might undergo a sharp reversal if the bulls don’t manage to push it above this level. A potential catalyst for this pullback could be the Triple Witching event in Wall Street, where options worth over $5.1 trillion are set to expire on September 20. Historically, stocks often drop in the week following this event. A strong pullback in the stock market could likely lead to a similar price action in Bitcoin.
Alternatively, a strong rebound above this resistance could increase the likelihood of Bitcoin rising to $70,000, a psychological level and its highest point in July. A complete bullish breakout will only be confirmed if it surpasses its all-time high.