Bitcoin rises above $62,000 amid rate cuts
On Thursday morning, Bitcoin's value soared beyond the $62,000 threshold, hitting a notable high of $62,190, following the Federal Reserve's announcement of a significant reduction in rates.
On the other hand, Ethereum showed a modest rise of 5% to $2,435, lagging behind Bitcoin with just a 1% boost throughout the same fortnight.
The rollercoaster pricing of Bitcoin came after a spell of instability unleashed by the Fed's rate cut decision the previous day. Bitcoin initially surged to $61,300, only to dip back to $59,400, before a wave of optimism propelled it upwards to $62,500, and then it slightly pulled back.
As Bitcoin led an uptrend in the larger crypto market, significant liquidations ensued. Data from Coinglass revealed that derivative cryptocurrency traders faced liquidations amounting to $204.3 million in the last day alone; out of this, shorts saw $130.5 million liquidated, and long positions contributed to $73.8 million, showing a market shift in favor of rising prices.
The Federal Reserve's unexpected rate reduction, the first in over four years, caught Wall Street off guard. Many had forecasted a modest cut of 25 basis points, but the aggressive 50 bps decrease underscored a bold approach to easing monetary policy, echoing the investors' desire for rapid action amidst persistent economic ambiguity.
Alex Kuptsikevich, the senior market analyst at FxPro, mentioned that the market's increased appetite for risk following the Fed's move has propelled cryptocurrencies to three-week highs.
According to Kuptsikevich, the cryptocurrency market has been navigating a downtrend since mid-March, suggesting that only breaking past the recent $2.25 trillion high could reverse this pattern.
Chris Aruliah, Bybit's Head of Institution, observed that historically, rate cuts tend to channel bank capital into the stock market due to the allure of lower interest rates, thereby benefitting riskier assets, including cryptocurrencies.
Nevertheless, Aruliah cautioned about the hurdles presented by economic uncertainties and market volatilities. Additionally, on-chain data hints at Bitcoin's future price movements being potentially influenced by the actions of short-term investors.
A CryptoQuant analysis concluded that the median purchase price of Bitcoin by those holding for 1-3 months often serves as a pivotal support or resistance level.
