Bitcoin (BTC) experienced a significant spike of over 6% in its price following Federal Reserve Chairman Jerome Powell’s announcement of a potential 25bps rate cut at the next meeting on September 18. This unexpected news has added to Bitcoin’s recent volatility, with prices swinging unpredictably in recent weeks. The market is now closely watching to see if this announcement could signal the start of a new bullish phase for Bitcoin.
On-Chain Data Signal Optimism
Despite the volatility, on-chain data from CryptoQuant is providing a glimmer of optimism for Bitcoin traders. The data reveals that traders are positioning themselves for further price appreciation. One key trend highlighted in the data is the significant decrease in Bitcoin exchange reserves on centralized exchanges. Since the end of July, the supply of BTC on exchanges has dropped from over 2.75 million to approximately 2.67 million, representing a 3% decline in just 30 days. This dwindling supply could result in a supply shock, where demand exceeds supply and leads to a potential price surge.
Currently, Bitcoin is trading above $63,000 and gaining momentum as it approaches the critical $65,000 mark. The price is holding above the crucial daily 200 Moving Average (MA), which is essential for maintaining the uptrend in a higher time frame. In order to break past the $65,000 mark, Bitcoin must confirm its bullish structure by remaining above the $57,500 level. Ideally, staying above the daily 200 Exponential Moving Average (EMA) at $59,538 would further strengthen the bullish momentum.
The combination of declining Bitcoin exchange reserves and the Federal Reserve’s policy announcement has generated optimism among investors. Many are now anticipating a potential Bitcoin rally in the coming months, supported by these bullish indicators. As the market continues to monitor these trends, there is a growing sense of confidence among traders and investors regarding Bitcoin’s future price movements.
