Bitcoin (BTC) surged to $63,000 at the opening of Wall Street on September 19, riding the wave of gains in the stock market. The BTC/USD 1-hour chart showed new three-week highs near $63,500 on Bitstamp, reflecting the excitement over the long-term easing of US financial policy. The Federal Reserve’s 0.5% interest rate cut the day before further fueled optimism. Equities and gold also experienced an upward trend, with the S&P 500 nearing all-time highs. Bitcoin finally started making progress towards key resistance levels, moving closer to its record peak from March.
Trading firm QCP Capital noted that the US 2Y/10Y treasury spread, which indicates a recession, has been inverted since July 2022 but has recently become more positive, reflecting market optimism and a shift towards riskier assets. QCP also mentioned that the Fed plans to make further interest rate cuts, with two expected before the end of the year. The S&P 500 and Nasdaq have already gained over 20% this year alone, according to trading resource The Kobeissi Letter.
Bitcoin traders responded to the positive market conditions with optimism. Byzantine General, a popular trader and social media commentator, described the spot markets as “strong,” while crypto trader Michaël van de Poppe stated that BTC/USD was “doing great.” Van de Poppe predicted that there may be a consolidation phase before further upward movement, but the markets are currently on an upward trajectory due to the statements made by Powell. He encouraged followers to buy the dips.
According to data from CoinGlass, there is significant resistance just below $64,000, which has become a popular post-Fed BTC price target. The data also showed a decrease in institutional shorting of Bitcoin. Ki Young Ju, founder of onchain analytics platform CryptoQuant, revealed that institutions are no longer aggressively shorting Bitcoin, as illustrated by the chart of CME Group Bitcoin futures net positioning.
In terms of US spot Bitcoin exchange-traded funds (ETFs), there were mixed flows over the week. However, data from Farside Investors confirmed that there was a shift in institutional stance, with net negative inflows for September 18. This contrasted with the previous day’s positive inflow of $187 million.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment and trading decisions.