Bitcoin (BTC) surged more than 6% yesterday after Federal Reserve Chairman Jerome Powell announced he was changing his policy and hinted at a potential 25 basis point interest rate cut at its next meeting on September 18. The unexpected news intensified bitcoin’s recent volatility, with prices swinging erratically in recent weeks.

Key on-chain data from CryptoQuant provides a glimmer of optimism. According to the data, traders are positioning for further price growth.

As the market digests the Federal Reserve’s modern stance, all eyes are on Bitcoin to see if this could signal the start of a modern bullish phase.

Bitcoin data shows market optimism

Bitcoin is trading above $63,000 and gaining momentum, preparing to break the critical $65,000 level.

On-chain data from CryptoQuant reveals growing market optimism, highlighting a significant trend that could drive prices higher. Specifically, Bitcoin Exchange Reserves on centralized exchanges have fallen to an all-time low. Since overdue July, the supply of BTC on exchanges has fallen from over 2.75 million to around 2.67 million, a 3% drop in just 30 days.

This drop indicates that fewer BTC are available to trade on exchanges, which could create a supply shock, a situation where demand exceeds supply, leading to a potential price augment. As Bitcoin’s availability on exchanges decreases, the probability of a price augment increases.

As Bitcoin begins to gain strength, the market is closely monitoring this trend, which could potentially push Bitcoin into modern bullish territory.

BTC Price Action: $65,000. What’s Next?

After two weeks of volatility and consolidation, Bitcoin is trading at $64,100 at the time of writing, holding above the key daily level of $200 Moving Average (MA).

This level is imperative for bulls to maintain the uptrend on higher time frames. For the price to break through the $65,000 level, it needs to confirm its bullish structure by holding above the $57,500 level. Ideally, it should hold above the daily 200-day exponential moving average (EMA) at $59,538.

These levels are key to establishing a sustained upward momentum. A stay above them would signal strength in the market, boosting confidence among traders and investors. Data on falling Bitcoin exchange reserves and the central bank’s policy announcement were met with optimism. Investors are increasingly expecting a Bitcoin rally in the coming months, fueled by these bullish indicators.