Bitcoin Breaks Through $65,000 Resistance, But Bears LurkBitcoin (BTC) rallied on Thursday morning, with bulls pushing to break through the $65,000 resistance level, buoyed by interest rate cuts and government stimulus packages. However, bears were not standing idle, attempting to break through the $63,000 support level overnight, only to be met with a strong surge
Bitcoin Breaks Through $65,000 Resistance, But Bears Lurk
Bitcoin (BTC) rallied on Thursday morning, with bulls pushing to break through the $65,000 resistance level, buoyed by interest rate cuts and government stimulus packages. However, bears were not standing idle, attempting to break through the $63,000 support level overnight, only to be met with a strong surge. BTC dipped as low as $62,672 in the early hours of Thursday, but bulls launched a counterattack, holding off the bears' tenacious resistance.
Bitcoin was not the only asset to rise. Equities were also trading in the green in early trading, while spot gold reached a new high overnight, touching $2,685 per ounce near the US market open, before profit-taking pulled it back to the $2,660 per ounce support level.
Regarding the overnight pullback in Bitcoin, Alex Kupcsikevich, senior market analyst at FxPro, suggests this could be consolidation ahead of a bullish run. He notes: "Considering the positive dynamics in global stock markets and the recent nature of the rally, the recent pullback looks like a consolidation of strength before a potential further surge." "Also, the strengthening dollar has been putting pressure on cryptocurrencies." He adds, "Bitcoin has so far failed to consolidate above the 200-day moving average."
"This morning, with low liquidity, the price fell to $62,700 hitting stop-loss orders, then rose by another $1,000. This has become a typical deviation from the extremes seen in recent days. Bitcoin has been forming a sideways channel in the past week, slightly tilted upwards, currently trading between $62,700 and $64,500. Breaking beyond it could trigger a medium-term trend after the current period of calm."
Bitcoin is currently trading at $64,912, up 1.92% on the 24-hour chart.
On the broader market uptick, David Morrison, senior market analyst at TradeNation, says it clearly indicates traders are in risk-on mode. He highlights, "This mornings rally put the Dow and S&P at all-time highs, while the Nasdaq 100 is currently just 2% below its all-time high in July."
"Risk appetite feels strong, with investors more concerned about their FOMO (fear of missing out) than being the biggest player in the market. For now, it feels like there is always someone ready to pay more than you to secure their ticket to the bull market."
As to what "could rock the party," Morrison points out, "There is a group of Fed speakers today, adding to speakers earlier this week, including Chairman Jerome Powell. None of them seem likely to disrupt the mood by expressing undue concern about an inflation resurgence or a potential collapse in the labor market. Instead, theyll likely offer a generally positive message."
On the latest data, Morrison emphasizes, "Weekly jobless claims continue to trend lower, and the final GDP update is unlikely to disrupt the market." Morrison was correct in this regard, as the Bureau of Economic Analysiss third and final reading of second-quarter GDP on Thursday showed that the economy expanded by 3.0% from April to June, unchanged from the previous estimate. The figures were in line with economists' expectations and generated little impact on asset prices.
Morrison states, "The only thing that seems to have investors worried over is whether the Fed will raise rates by another 50 or 75 basis points by the end of the year."
"If any investors are worried about high levels of debt, whether federal or otherwise, they are keeping their opinions to themselves. Why not? Neither candidate in the upcoming presidential election is keen on tackling this issue. Instead, both are happily talking about their spending plans."
Morrison briefly touches on gold's new high, noting, "Its been a good month for gold." He highlights, "Prices were falling after traders returned from the Labor Day holiday in the US, hitting the lower end of a month-long trading range. Prices have risen by 8% since then, closing above $2,700."
He also warns about a potential pullback after the recent gains. He says, "Gold has moved a long way with no major retracement, only a brief consolidation period so far this month."
"The daily MACD is positive because momentum is moving upward, though its heading into overbought territory. We should see a pullback, but that doesnt mean we will, and it doesnt tell us when."
Morrison states, "The scale and speed of any future pullback will provide clues to the next move for gold. Is it ready to top out? Or will we see something similar to the rally from 2009 to 2011?"
On silver, he says, "Its getting really interesting now. Up nearly 5% on Tuesday, down yesterday, up about 2% this morning. Its now retesting resistance around $32.50. If it can break through and hold there, further gains seem possible."
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