Bitcoin is up 11% since Tuesday following the Federal Reserve’s announcement of a 50 bps interest rate cut. This significant price movement pushed BTC past the $62,000 mark, a psychological level that turned investor sentiment to optimism.
However, despite the recent rally, critical data from Glassnode reveals that both Bitcoin capital inflows and outflows remain low, indicating reduced market activity.
The current state of the Bitcoin market shows a sense of balance, where the price is stable, but trading rates are lower than expected. While some investors see this balance as an attractive entry point, expecting a continued upward trend, others are more cautious. A lack of strong demand may lead to a decline or reversal of price pressure if new buyers fail to enter the market.
As Bitcoin hovers around this key price level, the next few days will be crucial in determining whether the market will continue to rise or face a pullback due to limited liquidity. Investors are closely monitoring the situation to see if this balance will break to promote growth or stagnation.
Bitcoin Min Profit and Loss Taking: What Does It Mean?
After days of positive price action and excitement about a potential bull run, Bitcoin still faces risks.
Key data from Glassnode highlights the current state of the equity market, prompting cautious optimism among investors. The Sell-Side Risk Ratio has fallen below the lower price band, indicating a small profit-taking or loss range in the current range. This suggests that an equilibrium has been reached, where investors are reluctant to make a move until there is a broader price expansion.
The explanation here is clear: Bitcoin needs to break out of its range to encourage the participation of more important investors. Price action has been oscillating within a well-defined range for the past six months, with dynamic pressures similar to spring coils. The tighter this range is, the more likely it is to cause dramatic price movements in either direction.
Recent major events, including the Federal Reserve’s interest rate cut, may serve Bitcoin’s needs. The 50 bps cut is seen as a sign of more liquidity in the market, which could fuel the expected rise in volatility.
Investors hope that this event will break the current price decline, setting the stage for the next important step for Bitcoin. Although the market is at an even level now, many believe that a major change is imminent.
BTC Breaks Above $62,000 – The Start Of A New Rally?
Bitcoin is trading at $63,493 after an impressive 22% rise from its local low set on September 6. The price broke the 200 daily moving average (EMA) at $59,396 and is now testing the 200 daily moving average (MA ) as resistance. .
These indicators are historically important to Bitcoin, as they often serve as important support and turning points during rallies. A retracement of the daily 200 MA would indicate long-term strength and could confirm the start of a further uptrend.
For bulls aiming to push BTC to new highs, breaking the daily 200 MA and the $65,000 level is crucial. Holding these levels as support would reinforce a change in the market structure, which has been dominated by a downward trend for the past six months.
However, if BTC fails to recover the 200 MA, a return to lower demand levels around $60,000 is possible. This price level may act as a magnet to test demand before continuing the uptrend, but a loss of $60,000 could trigger a deep correction. Investors are watching these levels closely as they will determine the direction of Bitcoin’s next big move.
Featured image from Dall-E, chart from TradingView