Key Points
- Bitcoin (BTC) price has closed above crucial support levels, following the start of the US Federal Reserve’s quantitative easing cycle.
- The decrease in Bitcoin supply on centralized exchanges and the bullish crypto outlook for Q4 could push Bitcoin towards a new all-time high.
Bitcoin (BTC) saw a nearly 3% increase in its price over the last 24 hours, reaching a high of approximately $62,508 before settling around $62,138. This rally has resulted in Bitcoin closing above the 50-day Moving Average (MA) for two consecutive days, and surpassing the 50% level on the Relative Strength Index (RSI).
Despite a daily death-cross between the 50 and 200 MAs, Bitcoin has maintained a strong support level above $53,697 since early July. This has led to a triple bottom and a bullish divergence on the daily RSI.
Factors Driving Bitcoin’s Price Increase
The price rally of Bitcoin over the past 24 hours can primarily be attributed to the Federal Funds Rate cut, which initiated the quantitative easing cycle. The Federal Reserve reduced its benchmark interest rate by 50 bps, more than the 25 bps cut expected by Wall Street analysts. This move aligns the United States with the European Central Bank (ECB) and the Bank of Canada in stimulating their economies through lower interest rates.
The correlation between Gold and Bitcoin prices due to their common use as safe havens is another factor that could drive a major bullish recovery in the Bitcoin price. The supply of Bitcoin on centralized exchanges is at a multi-year low of approximately 2.35 million, down from over 2.7 million at the start of the year. This decrease is largely due to high demand from institutional investors and US spot Bitcoin ETFs.
Future Predictions
From a technical perspective, if the bulls remain in control, Bitcoin is on track to retest its all-time high in the near future. However, to ensure a rally towards $68k, Bitcoin must consistently close above $62k in the coming days.
If the bulls fail to defend the current rising trend, Bitcoin could retrace towards $54k before rebounding in the fourth quarter.
