Bitcoin is up 11% since Tuesday after the Federal Reserve announced a 50 basis point interest rate cut. This significant price move pushed BTC above $62,000, a psychological level that has turned investors’ sentiment toward optimism.
However, despite the recent surge, key data from Glassnode reveals that Bitcoin-related capital inflows and outflows remain relatively subdued, indicating reduced market activity.
The current state of the Bitcoin market reflects a sense of equilibrium, where the price is stable but trading volumes are lower than expected. While some investors see this equilibrium as an attractive entry point, anticipating a continued uptrend, others are more cautious. The lack of forceful demand could potentially lead to a slowdown or reversal in price momentum if up-to-date buyers do not enter the market.
As Bitcoin hovers around this key price level, the coming days will be crucial in determining whether the market will continue to rally or pull back due to constrained liquidity. Traders are closely watching the situation to assess whether this equilibrium will be broken in favor of further growth or stagnation.
Bitcoin Minimum Profit and Loss: What Does It Mean?
After days of positive price action and excitement about a potential bull run, Bitcoin still comes with risks.
Key data from Glassnode underlines the current market equilibrium, which is causing cautious optimism among investors. The Sell-Side Risk Ratio has fallen below the low band, indicating minimal profit taking or loss reduction in the current range. This suggests that equilibrium has been reached and investors are hesitant to act until there is a broader price expansion.
The interpretation here is clear: Bitcoin needs to break out of its range to encourage more investor participation. Price action has been hovering within a tight range for the past six months, with volatility compressing like a spring. The tighter this range tightens, the more likely it is to lead to a edged price move in either direction.
Recent macroeconomic events, including the Federal Reserve’s interest rate cut, could provide the catalyst Bitcoin needs. The 50 basis point cut has been seen as a signal of greater liquidity in the market, which could fuel the expected escalate in volatility.
Investors are hoping that this event will break the current price stagnation, setting the stage for the next significant move for Bitcoin. Although the market is in equilibrium right now, many believe that a major change is just around the corner.
BTC breaks through USD 62,000 – the beginning of a up-to-date rally?
Bitcoin is trading at $63,493 after an impressive 22% gain from a local low on September 6. The price broke through the daily 200-period moving average (EMA) at $59,396 and is currently testing the daily 200-period moving average (MA) as resistance.
These indicators are historically key for Bitcoin, as they often serve as key support and turning points during rallies. A reclaim of the daily 200 MA would signal long-term strength and could confirm the start of a sustained uptrend.
For bulls looking to push BTC to up-to-date highs, a break through the daily MA 200 and the $65,000 level is vital. Holding these levels as support would solidify a structural shift in the market, which has been dominated by bearish trends over the past six months.
However, if BTC fails to reclaim the 200 MA, a pullback towards lower demand levels near $60,000 is likely. This price level could act as a magnet to test demand before the uptrend continues, but a loss of $60,000 could result in a deeper correction. Traders are watching these levels closely as they will determine the direction of Bitcoin’s next huge move.
Featured image is from Dall-E, chart is from TradingView
