The Bitcoin price is eying the key resistance level at $60,000 as investors are buoyed by several key catalysts. The BTC coin is trading at $59,105, which is about 105% above the lowest level in July and just $6,000 below its all-time high. This rally values the coin at more than $1.1 trillion.
Why is BTC rallying?
There are several reasons why the Bitcoin price is rallying. First, there are hopes that the Securities and Exchange Commission (SEC) will give a go-ahead of a Bitcoin futures exchange-traded fund (ETF) as early as Monday next week. The regulator has a deadline of Monday next week in which it is supposed to accept or deny an ETF presented by ProShares.
Other companies are expected to launch their Bitcoin ETFs if the SEC gives a go-ahead. They include VanEck, Galaxy Digital, Invesco, and Ark Invest, among others. Analysts believe that a Bitcoin ETF will drive more demand for Bitcoin by institutional investors.
Second, the Bitcoin price is rising partly because investors have already priced in the potential actions by the Federal Reserve. Data published this week showed that the US inflation remained stubbornly above the Fed’s target of 2.0%. The unemployment rate has dropped to 4.8%.
At the same time, minutes by the Fed showed that members were optimistic that tapering will start as soon as in November. Therefore, while a hawkish Fed is usually bearish for Bitcoin and other riskier assets, these risks have already been priced in.
Bitcoin and stocks correlation
Third, the BTC price rebound is coinciding with the sharp rally of stocks as the earnings season continues. In the US, the S&P 500, Dow Jones, and Nasdaq 100 have rebounded while in Europe, the main indices are having their best months since March. Bitcoin tends to have a close correlation with stocks.
Fourth, cryptocurrency is rising because of the falling fear in the market. The fear and greed index has jumped from the extreme fear zone of 25 to about 40. This means that investors are currently embracing risks.
Finally, fears about China’s crackdown have abated recently. This is because investors believe that demand remains steady. Mining activity is also doing well, as evidenced by the rising hash rates. The US has become the biggest Bitcoin miner in the world.
Bitcoin price prediction
The daily chart shows that the Bitcoin price has been in a strong bullish trend. The coin managed to move above the key resistance level at $52,713. It has also moved above the upper side of the bullish flag pattern and is above the 25-day and 50-day moving averages. Therefore, there is a likelihood that the coin will maintain a bullish trend as bulls eye the all-time high at $65,000.
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