Bitcoin Jumps 22% Post-Fed Rate Cut, Yet Key Resistance Sparks Crash Fears – Bitfinex
24 Septembre 2024 - 2:30AM
NEWSBTC
Bitcoin (BTC), the world’s largest cryptocurrency, has rallied over
22% in the past two weeks to trade at around $63,200, following a
significant drop to $52,000 on September 6. This is the highest
level BTC has reached in almost two months. Critical Resistance At
$65,200 Looms According to a recent report from digital asset
trading platform Bitfinex, this price increase was largely driven
by the Federal Reserve’s (Fed) decision to cut interest rates,
which helped propel BTC to a new local high of $64,200 on September
20. However, despite this positive momentum, Bitcoin is still
just below a critical resistance level of $65,200, established on
25 August. The report notes that a failure to breach this level
could confirm a worrying trend that has characterized BTC’s price
action since its all-time high of $73,666 in March. Related
Reading: Polygon (MATIC) To Come back From The Dead As Ascending
Triangle Appears Since that peak, Bitcoin has repeatedly struggled
to break previous highs before forming new local lows, indicating a
persistent downtrend. This pattern of lower and lower highs is
evident on the daily Bitcoin chart, suggesting that the
cryptocurrency has been on a downward trajectory since mid-March.
As seen on the daily BTC/USDT chart above, this repeated price
action has been characterized by a sustained and continuous
downtrend since the March peak. Nonetheless, further
volatility fueled by macroeconomic fears triggered another crash on
August 5. BTC hit its lowest level in six months, down to the
$49,000 level from the $70,000 level it had been trading at since
late July. What Drove Bitcoin Recent Gains? One notable concern
that Bitfinex finds is the discrepancy between BTC’s price gains
and open interest in future markets. As BTC rose, open interest
rose even faster, reaching $19.43 billion – up from $18.93 billion
on August 25- while the Bitcoin price remained around $1,000 below
its local high. This divergence suggests that much of the
recent price movement may be driven by speculative trading in
futures and perpetual contracts rather than strong demand in the
spot market. Related Reading: SUI Eyes Potential Pullback As RSI
Flashes Warning: $1.4 Retest In Sight Earlier this month, Bitfinex
observed that Bitcoin’s rise to around $62,000 was largely fueled
by robust spot market buying, in stark contrast to the current
situation. While this trend in open interest might suggest
increased speculative interest in Bitcoin, it does not directly
imply bearishness. The report states that open interest is not a
definitive measure of leverage in the market; it merely reflects
the total value of outstanding contracts. Finally, the report
suggests that this renewed speculative interest could be beneficial
as traders return from their summer holidays and reassess their
positions following the rate cut. However, Bitfinex does note that
in the absence of clearer indicators of sustained bullish momentum,
market participants should remain cautious. Featured image
from DALL-E, chart from TradingView.com
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