Bitcoin has witnessed a remarkable rally, approaching $124,000, fueled by a surge of US demand, shifting Federal Reserve policies, and optimism for a strong fourth quarter. This price rally signifies a positive investor sentiment.
Key takeaways:
- Bitcoin surged 14% within a week, nearing $124,000 amid a US government shutdown.
- On-chain indicators revealed a $1.6 billion increase in buying activity alongside a notable premium on Coinbase, indicating strong demand from US investors.
- Analysts predict the next resistance level could be near $130,000, with potential new price discoveries in the coming weeks.
As Bitcoin climbs steadily, it has gained nearly 14% after bouncing from a low near $108,600 just last Friday. This surge coincides with a total cryptocurrency market capitalization exceeding $4.21 trillion, suggesting a broad market strength.
Interestingly, one major factor contributing to this price upturn seems to be the ongoing US government shutdown, which has not hindered market momentum. In these uncertain times, Bitcoin’s value has risen by 8% since the onset of the shutdown as traders navigate the absence of concrete policy directions. Furthermore, the shutdown complicates the Federal Reserve’s upcoming decisions regarding inflation and job data that could potentially be delayed, boosting speculative interest in cryptocurrencies.
According to analysts at Bitfinex, “Bitcoin’s trajectory towards a new all-time high appears genuinely organic. We suspect that Trump’s potential stimulus announcement could also influence Bitcoin’s price positively. This could resemble the effects observed after COVID-related stimulus checks. Furthermore, consistent ETF inflows contribute positively to the market.”
Macro conditions in the US, including easing inflation and a more accommodating Federal Reserve stance, are favoring investments in riskier assets. If these inflows continue and macroeconomic data remains stable, new all-time highs in Bitcoin could be well supported heading into Q4.
On-chain Bitcoin buying pressure intensifies
On-chain analytics show strong demand driving this price surge. Analyst Maartunn reported a significant buying spike exceeding $1.6 billion on all exchanges within one hour. Moreover, the Coinbase Premium Gap, which highlights the price differential between Coinbase and Binance, has escalated to $91.86.
Yet, this premium is the highest recorded since mid-August and could signal a potential softening of bullish momentum.
Price discovery anticipated for the upcoming week
With Bitcoin close to its all-time highs, analysts are anticipating significant price discovery in forthcoming trading sessions. Cryptocurrency trader Jelle remarked, “$120,000 has been turned into support; if this holds through the weekend, I expect price discovery to commence as early as next week.”
Trader Rekt Capital characterized this phase as the “Phase 3 Price Discovery” of the current cycle—a breakout stage likely to set new all-time highs.
Analyst Skew emphasized that while demand remains strong, heavy sell orders around $130,000 present the next critical resistance level. Strong inflows from US investors, evident on exchanges like Coinbase, could influence upcoming daily closes crucial for sustaining Bitcoin’s upward momentum.
This article does not provide financial advice. Investments involve risks—readers are encouraged to perform their own research before making decisions.
