Fed’s rate cut hints boost Bitcoin, breaking past $62k with bullish market momentum.
Increased options activity shows traders’ confidence, targeting 80k-85k by December-March.
Bitcoin stabilizes in a new $61k-$70k range, with strong ETF inflows and diminishing sell pressure.
Bitcoin’s price surged to $64,151.81, a 5.47% jump in 24 hours, following Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. His remarks, hinting at possible interest rate cuts in September, ignited optimism among U.S. investors, driving strong demand for Bitcoin.
QCP: BTC finally got the recovery that we've been waiting for. It seems Powell's speech at Jackson Hole was the catalyst it needed to breakout of the 58k-62k range. Rate cuts are confirmed for Sep but there was no indication on how much, so August Payrolls will be critical. US…
— Wu Blockchain (@WuBlockchain) August 24, 2024
While Powell did not provide specifics, the prospect of rate cuts has put the spotlight on August Payrolls, which could influence the size of the cuts. A moderate 25 basis point cut is generally expected to be positive for the market. A larger 50 basis point cut could signal the Fed’s determination to avert an economic downturn.
Following Powell’s speech, the market saw a spot-driven rally with flat funding rates. This rally is expected to attract more leveraged long positions, particularly if Bitcoin holds the $62,000 support level as the end of summer approaches.
On the options front, traders have shown increased confidence, with substantial topside positioning. Just before the speech, approximately 600 contracts of 62.5k-63k Calls for Monday, which are now in the money, were purchased. Additionally, bullish sentiment is extending into the long term, with increased bets on December and March contracts targeting 80k to 85k strikes.
As Bitcoin settles into a new trading range of $61,000 to $70,000, selling pressure appears to be diminishing, and spot ETFs have seen net inflows in 10 of the last 12 days. Despite upcoming events such as Nvidia’s earnings and the September rate cut, the market is expected to remain within this range until the fourth quarter. In the wake of this news, Bitcoin’s price surged to $64,151.81, reflecting a 5.47% increase over the past 24 hours.
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