Bitcoin experienced a notable surge of over 6% yesterday following Federal Reserve Chairman Jerome Powell’s announcement of an impending policy adjustment, hinting at a potential 25 basis points rate cut in the upcoming meeting on September 18. The unexpected nature of this announcement has further contributed to Bitcoin’s recent volatility, with unpredictable price swings dominating the market in recent weeks.
Crucial on-chain data from CryptoQuant is shedding light on an encouraging trend. According to their data, traders are positioning themselves for further price appreciation, suggesting a growing optimism within the market.
As the financial world closely follows the Fed’s new stance, there is a heightened focus on Bitcoin to determine if this signals the onset of a new bullish phase.
Bitcoin is currently trading above $63,000 and gaining momentum as it edges towards breaking past the critical $65,000 mark. On-chain data from CryptoQuant highlights a significant decline in Bitcoin exchange reserves on centralized exchanges, which have plummeted to an all-time low. Since the end of July, the supply of BTC on exchanges has decreased from over 2.75 million to approximately 2.67 million, marking a 3% drop within a mere 30-day period.
This reduction indicates fewer BTC available for trading on exchanges, potentially creating a supply shock where demand surpasses supply, thereby driving up the price. As Bitcoin’s availability on exchanges dwindles, the likelihood of a price increase grows stronger.
The market’s keen eye is trained on this trend, with many anticipating that Bitcoin’s newfound strength could propel it into a sustained bullish territory. After two weeks marked by volatility and consolidation, Bitcoin is currently trading at $64,100, firmly holding above the crucial daily 200 Moving Average (MA).
Maintaining this level is critical for bulls to preserve the uptrend over a longer timeframe. For Bitcoin to breach the $65,000 mark, it must uphold its bullish structure by staying above the $57,500 level, with an emphasis on remaining above the daily 200 Exponential Moving Average (EMA), which currently sits at $59,538.
These technical levels are vital for sustaining upward momentum. Holding above these thresholds would signal market strength, bolstering confidence among traders and investors. The combination of declining Bitcoin exchange reserves and the Federal Reserve’s recent policy announcement has been met with growing optimism, with investors increasingly expecting a Bitcoin rally in the coming months spurred by these bullish signals.
