Key Points
- Bitcoin (BTC) surpasses $65,000 resistance point, indicating a bull market, boosted by China’s stimulus measures and global equity market rally.
- Increased institutional interest and net inflows of $308 million into Bitcoin ETFs also contribute to Bitcoin’s rally.
Bitcoin (BTC) and other cryptocurrencies have started the week on a high note, propelled by ongoing stimulus discussions in China, the world’s second-largest economy.
For the first time since September 30, Bitcoin broke through the critical resistance level of $65,000. This represents a rise of over 10% from its lowest point this month and a 32% increase from its August low, indicating a bull market.
Global Market Influence
This surge in Bitcoin coincided with a robust rally in the global equity market following the announcement of various stimulus measures by Chinese officials. The Shanghai Composite Index saw a 2% rise, while the Shenzhen Index increased by 2.65%. Similar trends were observed in other Asian and European markets. In the U.S., futures tied to the Nasdaq 100 and Dow Jones continued their upward trajectory.
Bitcoin’s rally was further bolstered by increased institutional interest, with investors consistently purchasing spot Bitcoin ETFs. According to data from SoSoValue, ETFs experienced net inflows of $308 million last week.
Bitcoin’s Future Outlook
The monthly chart indicates potential for more long-term gains for Bitcoin. It suggests that the BTC price has been forming a cup-and-handle pattern since reaching a peak of $68,856 in 2021. This level was tested again this year, forming a rounded bottom.
The recent consolidation is part of the handle section, often preceding a significant bullish breakout. This consolidation is also part of a bullish flag pattern, characterized by a lengthy flagpole followed by rectangular consolidation.
The chart also reveals that Bitcoin formed a hammer candlestick pattern in August, one of the most bullish signs. As such, more gains will be solidified if Bitcoin surpasses the year-to-date high of $73,800. However, these patterns, particularly on the monthly chart, may take some time to fully materialize.
The daily chart also suggests potential short-term gains. Bitcoin has remained consistently above the 50-day and 200-day Exponential Moving Averages, avoiding the formation of a death cross pattern, which often signals further downside.
Bitcoin has been forming a broadening wedge pattern since March, marked by a series of higher lows and lower highs. In this instance, its higher lows were at $73,800, $72,000, and $70,000. A break above the descending trendline and the all-time high at $73,800 will confirm a bullish breakout and likely lead to further gains. The probability of Bitcoin reaching a record high this year is increasing.
According to Polymarket, there is a 62% chance that Bitcoin will rise to $63,800 this year, the highest odds since September 29 and significantly higher than this month’s low of 32%.