Bitcoin reached the $65,000 mark over the weekend (Aug 24-25), continuing a three-week recovery from a drop to $49,500. Investors are questioning whether range trading will continue or if new highs are imminent.
DXY falls to a year-to-date low
The dynamics between the US dollar Index (DXY) and BTC are a significant indicator for predicting Bitcoin prices. Last week, DXY reached a year-to-date low below 101, which was accompanied by Bitcoin's price surge to $65,000.
Powell’s statement
On August 23, US Federal Reserve Chairman Jerome Powell announced that the time is right for an interest rate cut, although he did not specify the amount. This announcement led to Bitcoin's price rising over 6%, with 2-year bond yields dropping to their lowest level since March 2023. Wall Street participants also have bullish expectations for stocks following the Fed's confirmation of upcoming rate cuts.
Decreased Bitcoin demand
Glassnode data shows Bitcoin returning to an 'equilibrium' zone as indicated by the MVRV deviation bands metric, suggesting investor profitability has reset. Meanwhile, Bitcoin demand has slowed since April when the price was above $70,000. There has been a notable decline in demand and liquidation volumes.
Despite Bitcoin's recent surge to $65,000, data indicates moderate investor demand. Analysts note a decrease in investment activity and low liquidation volumes, which may suggest a temporary market stabilization.
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