Bitcoin climbed to local highs of $62,600 as its price rose substantially. This milestone emerged in reaction to the status of the Federal Reserve that had embarked on a rate-cutting cycle with a sizeable 0.5% reduction. This indeed was a great record bearing in mind that historically this marked only the third time that such a cycle began with a given rate decrease.
It attracted Bitcoin buyers and a rampage of short position liquidations by the Fed decision. Looking at the numbers from CoinGlass, these liquidations amounted to $128 million within a day. The intense oscillation between exchange order books pressed an even faster rate of Bitcoin’s price increase.
Market Response to the Fed Rate Cut
The Federal Reserve decision taken triggered reactions from investors most especially the market was highly sensitive to the central bank policy direction. Analysts saw this as a message for a less ‘tight’ monetary path in the future and there was rejuvenate focus on risk assets such as bitcoins.
When the U. S stock markets faintly responded to the results, the Bitcoin and others pushed forward. Currently, there was a lot of concern of how inflation was going to be handled in the short run and how the actions of the Fed would impact growth. Although some doubts still remained, Bitcoin showed several bright moments during the week to give the financial markets.
$128 Million in Liquidations
Big-scale liquidation of short BTC positions was one of the main points every trader focused on during the event. Such liquidations happen as the Bitcoin price went up, and traders who had short-selling BTC had to exit at a loss. Cryptocurrency monitoring platform CoinGlass revealed that the global liquidations have averaged $128 million for the last 24 hours leading up to this price rally.
We can observe such liquidations always happen in commotion moves in the market and them normally happen where traders are involved in leveraged trading. This was in reaction to what became the acceleration of Bitcoin to its $62 dollar mark. 6K the forced liquidations contributed to the price increase to even further.
Comparing Bitcoin’s Historical Highs
While that current rally has not even extended up to hitting that mark, most analysts see it as the signal of a subsequent rally. The new rally comes at the timeframe of increased institutional engagements and macroeconomic factors that are pushing towards new investment forms like Bitcoin.
As the market of crypto-currencies tends to be inherently unstable in its price, traders and investors keep a close watch on it as far as the price of Bitcoin is concerned. Because the decisions made by the Fed have a direct reflection in the market, any cut in the rates will impact Bitcoins and other related risky assets.
What’s Next for Bitcoin?
Therefore, there are several factors that will continue to determine Bitcoin’s price into the future including regulation, macroeconomic events and institutions. There is potential for current rally due to actions taken by Fed in monetary policy to continue in to the next year although volatility can always exist.
