Bitcoin's rise to $65,000 is fueled by liquidity and institutional interest in spot ETFs.
A brief dip from Mt. Gox news hasn't dampened strong demand as it nears key resistance.
With PCE data due, Bitcoin's path to $70,000 may face increased volatility.
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Bitcoin's recovery continues this week, fueled by last week’s decision from the Fed to cut interest rates more aggressively, alongside China’s easing measures and encouraging data from the U.S. economy.
As we approach the weekend, Bitcoin has entered the $65,000 range, breaking out of a lower high formation that has held since May. This significant upward movement stems from increased liquidity in global markets and growing demand for Bitcoin from traditional investors, particularly through spot ETFs.
Since the Fed's interest rate cut, over half a billion dollars has flowed into the spot ETF market, boosting prices. Recent economic data further supports this risk appetite, reinforcing confidence that the Fed will persist with its rate-cutting strategy.
However, the week hasn’t been without its challenges for Bitcoin. Despite the overall positive sentiment, news from Mt. Gox caused a brief mid-week fluctuation. Reports of Bitcoin withdrawals from Mt. Gox wallets tested the $63,000 support level. Nevertheless, institutional investors seized this opportunity, quickly pushing the price back up to $65,000.
This week also brought verbal guidance from Fed members, confirming the continuation of the rate-cutting process. All eyes are on the U.S. Personal Consumption Expenditures Index (PCE), which will be announced today. If the data meets expectations, the cryptocurrency market could enter the weekend on a positive note.
Key Levels on Bitcoin's Path to $70,000
From a technical standpoint, Bitcoin has traded sideways this week, using the $63,600 level as a pivot. Following positive data yesterday, it targeted the resistance level at $65,900 (Fib 0.618). The range between $65,900 and $68,200 represents the final resistance area before reaching $70,000.
As Bitcoin maintains its upward trend throughout September, it shows signs of being overbought in the short term. This could lead to fatigue among buyers trying to break through the $65,900 resistance.
However, a strong catalyst could boost buying volume and allow Bitcoin to test the resistance area from July, which falls between $65,900 and $68,200. While favorable PCE data could act as a catalyst, it might not be enough to push through this resistance.
Looking ahead, Bitcoin's trajectory appears aimed at the $70,000 mark, but expect volatility in the short term. If Bitcoin fails to achieve a daily close above $65,900, investors may shift their focus to the average support level of $63,600. Establishing a solid base above this level is crucial for sustaining the upward trend. Should a breakout occur, the next support could drop to the $61,200 level.
Despite the potential for pullbacks, the short-term exponential moving averages (EMAs) are showing upward momentum, supporting the current rise. The Stochastic RSI indicates overbought conditions but hasn't yet signaled a reversal.
In conclusion, if Bitcoin can navigate potential pullbacks to $63,600 effectively, the chances of moving toward $68,200—the upper band of the descending channel—will improve. A successful breakout may prompt more investors to buy in, potentially leading Bitcoin to explore new peaks in the last quarter.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk is at the investor's own risk. We also do not provide any investment advisory services.
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