Bitcoin Surges Above $64,500 Following Powell’s Rate Cut Hints at Jackson Hole
The price of Bitcoin saw a significant boost over the weekend following Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium.
As Powell hinted at potential interest rate cuts, on-chain data revealed a noticeable increase in Bitcoin demand, particularly within the United States.
Powell commented “the time has come for policy to adjust” in Jackson Hole Symposium cemented a rally of risk assets, essentially a Powell Put.
BTC jump from 61k to 64k and is sitting above all the short-term cost basis. This is one of the signals that the desk is previously… pic.twitter.com/bsdp3LyrOC— Dxm (@Patrickyeo168) August 25, 2024
Bitcoin Demand Spikes in the US: Price Impact
This spike in interest followed the Fed’s announcement of an impending cycle of lower interest rates, which traditionally benefits riskier assets like Bitcoin.
#Bitcoin's price is consolidating sideways for over 3 weeks now.
> 1HR Perp BTC is showing steady sell pressure, while 4HR Spot BTC is showing strong buy pressure.
> Aggregated volume on Coinbase + Kraken (USA market) is showing significant buy pressure.
Summary Analysis;
I… pic.twitter.com/yX7zDm96zb— ImNotTheWolf (@ImNotTheWolf) August 23, 2024
Lower rates typically reduce returns on conventional financial instruments such as bonds, making cryptocurrencies a more attractive option for investors seeking higher yields.
Key Indicators:
- Coinbase Premium: The Bitcoin price premium on Coinbase, the largest cryptocurrency exchange in the U.S., reached its highest level since mid-July. The Coinbase premium is the difference between Bitcoin’s price on Coinbase and other global exchanges. A rising premium indicates heightened demand from U.S. investors who are willing to pay more to acquire Bitcoin.
- Market Sentiment: The increasing demand suggests that U.S. investors are positioning themselves for potential gains in the crypto market, driven by expectations of a more favourable monetary policy. However, this rising demand and price premium could also lead to increased market volatility.
Growth Context:
This surge in demand comes at a crucial time. Over the past few weeks, Bitcoin demand has remained relatively stagnant.
CryptoQuant reported that since April 2024, when Bitcoin was priced at around $70,000, the apparent demand had been sluggish.
#Bitcoin is still trading inside this descending broadening wedge 👀
Break above $70,000 — and all bets are off.
— Jelle (@CryptoJelleNL) August 24, 2024
The recent uptick in demand in the U.S. could be the catalyst needed to propel Bitcoin’s price back toward its previous highs.
Technical Analysis: Bitcoin Price Outlook
- Current Price: Bitcoin is currently trading above the $63,500 level, showing strong signs of upward momentum.
- Resistance Levels: The next key resistance is around $65,400, which could be the target if the bullish momentum continues.
- Support Levels: Immediate support is located at $63,650, offering a cushion against potential short-term declines.
- Relative Strength Index (RSI): The RSI is at 68, indicating strong buying pressure. While this is near overbought territory, it still suggests that there is room for further upward movement.
- 50-Day Exponential Moving Average (EMA): The 50 EMA, currently at $63,200, acts as a strong support level, reinforcing the bullish trend.
Bitcoin Price Forecast:
- Bullish Outlook: Bitcoin is expected to maintain its bullish trajectory above the $63,500 level. A successful breach above the $65,400 resistance could open the door for further gains.
- Potential Risks: However, if Bitcoin falls below the $63,500 support, it may signal a temporary correction, with the next support level at $63,200.
Conclusion
The surge in U.S. demand for Bitcoin following Powell’s dovish remarks at the Jackson Hole symposium has injected new energy into the cryptocurrency market.
With the Coinbase premium rising and technical indicators showing strong bullish momentum, Bitcoin appears poised for further gains in the near term.
However, traders should keep an eye on key support levels, as any breach could lead to a short-term pullback.
If the current demand is sustained and spreads to other markets, Bitcoin could potentially revisit its previous all-time highs, offering significant opportunities for investors.
