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Bitcoin Price Reaches Key Resistance Level Amid Dovish Interest Rate Decision
Bullish Catalysts for Bitcoin
Bitcoin surged to the crucial resistance point of $64,000, marking its highest level since August 9. This ascent into a technical bull run follows a 20% increase from its lowest point this month.
The primary driver behind this price action was Wednesday’s Federal Reserve decision, which cut rates by 50 basis points and suggested potential future cuts within the year.
Additionally, Bitcoin’s momentum accelerated after the Bank of Japan maintained its interest rates, despite the country’s elevated inflation rate. Concerns over a potential Japanese yen carry trade unwind, which had previously pushed assets downward in August, were alleviated.
Institutional investors and countries have continued to accumulate Bitcoin and Bitcoin ETFs. Over the past five trading days, net Bitcoin ETF investments exceeded $567 million.
MicroStrategy has also been actively purchasing Bitcoin, increasing its total holdings to over 252,000 BTC. This investment has resulted in an unrealized profit of over $5.95 billion.
MicroStrategy has acquired 7,420 BTC for ~$458.2 million at ~$61,750 per Bitcoin and achieved a BTC yield of 5.1% quarter-to-date and 17.8% year-to-date. As of September 19, 2024, we hold 252,220 BTC acquired for ~$9.9 billion at ~$39,266 per Bitcoin.
El Salvador’s government currently holds 5,800 Bitcoins and continued to accumulate this week, while Bhutan holds Bitcoins worth over $800 million, a significant amount for a country with a GDP of $3 billion.
Bitcoin’s rise also coincided with the fear and greed index moving from the fear zone to a neutral area of 46, a positive indicator for cryptocurrencies.
Bitcoin Hits a Key Resistance
On the daily chart, Bitcoin has reached a critical resistance level at $64,000, aligning with the descending trendline that connects the highest swings since June 7. Bitcoin faced substantial resistance at this level in July and August.
Maybe this time it really will be different.
However, there is a risk of a sharp reversal if bulls fail to push Bitcoin above this level. A potential catalyst for a pullback could be the Triple Witching event on Wall Street, where options worth over $5.1 trillion will expire on September 20. Historically, stocks often drop in the week following this event, which could similarly impact Bitcoin.
Conversely, a strong rebound above this resistance could propel Bitcoin to $70,000, a psychological level and its highest point since July. A complete bullish breakout will only be confirmed if Bitcoin surpasses its all-time high.
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