Bitcoin (BTC) Exchange Reserves Plunge to All-Time Low, Market Optimism Grows as BTC Price Action Targets $65k

Yesterday, Bitcoin (BTC) spiked over 6% following Federal Reserve Chairman Jerome Powell's announcement that they are adjusting its policy and hinting at a potential 25bps rate cut at the next meeting on September 18.

Bitcoin (BTC) price soared over 6% on August 29 after Federal Reserve Chairman Jerome Powell hinted at a potential 25 basis point rate cut at the next meeting on September 18.

This surprising news follows a recent string of upbeat economic data and comes as the central bank is set to begin discussing whether to adjust its policy.

After two weeks of volatility and consolidation, Bitcoin is currently trading at $64,100 at the time of writing and holding above the crucial daily 200 Moving Average (MA). This level is essential for bulls to maintain the uptrend in a higher time frame. For the price to break past the $65,000 mark, it must confirm its bullish structure by holding above the $57,500 level. Ideally, staying above the daily 200 Exponential Moving Average (EMA), which sits at $59,538, is preferable.

Crucial on-chain data from CryptoQuant is providing a glimmer of optimism. According to the data, traders are positioning for further price appreciation. As the market digests the Fed’s new stance, all eyes are on Bitcoin to see if this could mark the beginning of a new bullish phase.

Bitcoin pricedataIndex: Yesterday, Bitcoin (BTC) spiked over 6% following Federal Reserve Chairman Jerome Powell’s announcement that they are adjusting its policy and hinting at a potential 25bps rate cut at the next meeting on September 18. This unexpected news has fueled Bitcoin’s recent volatility, with prices swinging unpredictably in the past weeks.

suggesting that less BTC is available for trading on exchanges, which could create a supply shock, a situation where demand outstrips supply, leading to a potential price surge. As Bitcoin’s availability on exchanges diminishes, the likelihood of a price increase grows.

Moreover, the seven-day realized volatility for Bitcoin has dropped to its lowest level since December 2020. This metric, which measures the volatility of an asset’s returns over a specific period, indicates that traders are expecting a period of relative calm in the market. However, a sudden shift in market sentiment or unexpected news could quickly lead to a surge in volatility.

After a strong first half of 2023, Bitcoin has faced challenges in recent months, with two failed attempts to break past the $65,000 resistance. However, the recent positive developments, including the Fed's announcement and the on-chain data, could provide the necessary momentum for a sustained breakout.

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