Bitcoin hits three-week high amid market optimism
Bitcoin's value soared to its highest in three weeks on Friday, continuing its upward trajectory over the weekend. This surge in price comes as investors are buoyed by a series of positive expectations for the months ahead.
This includes anticipation around the end of the U.S. Federal Reserve's tightening cycle, which reached its zenith last July with a benchmark rate set between 5.25% and 5.5%.
Furthermore, the forthcoming U.S. presidential election in November, with Donald Trump and Kamala Harris as potential candidates, could significantly influence the future of cryptocurrency regulations in the country.
Recently, Jerome Powell, the Chair of the Federal Reserve, indicated the possibility of reducing interest rates next month. This comes after observing signs of easing inflation and growing concerns over a weakening job market.
Such statements have contributed to a boost in riskier assets, including cryptocurrencies, propelling Bitcoin to surpass the $62,000 mark for the first time since the beginning of August.
Over the weekend, Bitcoin's price soared even further, reaching just shy of $65,000 before slightly retracing to around $64,000, according to CoinGecko.
The U.S. job market's recent data also bolstered the belief among investors that the Federal Reserve might proceed with rate cuts come September.
Since late February, Bitcoin has fluctuated between $49,000 and $71,000, following the SEC's approval of several Bitcoin-linked exchange-traded funds and a subsequent decline from peak market enthusiasm.
QCP Capital noted in an investor dispatch that Bitcoin is now "comfortably sitting in the well-known $61,000 to $70,000 bracket."
The firm highlighted a gradual depletion of sell supply and increased net inflows into spot ETFs over much of the past two weeks, underscoring a growing investor preference for the asset.
According to QCP Capital, Friday's price rally was "primarily driven by spot trading," suggesting an upcoming rise in leveraged long positions, especially if Bitcoin maintains its current price level as the summer holiday period ends.
This suggests the market may witness traders leveraging borrowed funds to amplify their investments, with hopes that the asset's value will continue its ascent.
