(Kitco News) – Bitcoin (BTC) bulls remained emboldened by interest rate cuts and government stimulus packages on Thursday morning and are pushing to overtake resistance at $65,000, but bears aren’t going down without a fight.
The fervent push higher follows an overnight attempt by bears to break below support at $63,000. King Crypto hit a low of $62,672 in the early hours of Thursday before bulls set out to do some revenge trading as an answer to the bear's obstinance.
BTC/USD Chart by TradingView
Bitcoin and the broader crypto market aren’t the only assets seeing gains as stocks are well into green territory during morning trading; at the same time, spot gold extended its new record high streak overnight, hitting $2,685/oz near the U.S. market open before profit-taking dropped it back down to support at $2,660/oz.
Addressing the overnight pullback for BTC, Alex Kuptsikevich, senior market analyst at FxPro, said it was likely a bit of consolidation before bulls pushed higher.
“Given the positive dynamics of global equity markets and the nature of recent gains, the latest pullback looks like a consolidation of forces before a possible further spurt,” he said. “Additionally, the strengthening dollar has also put pressure on cryptocurrencies.”
“Bitcoin has so far failed to consolidate above the 200-day moving average,” he added. “In the morning, the price pulled back on stop orders in low liquidity to $62.7K but then added $1K at the time of writing. This has become a typical deviation from the extremes in recent days. For the past week, Bitcoin has been forming a sideways channel just under $2K wide with a slight upward bias that now runs through $62.7K-$64.5K. A move beyond it could launch a medium-term trend after the current lull.”
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $64,912, an increase of 1.92% on the 24-hour chart.
As for the pan-rally in the broader markets, David Morrison, senior market analyst at Trade Nation, said it clearly indicates that traders are in risk-on mode.
“This morning’s rally took the Dow and S&P to fresh all-time highs, while the NASDAQ 100 is now just 2% below its own record high from July this year,” he highlighted. “Risk appetite feels strong, with investors more concerned by their FOMO than being the one that ‘top-ticks’ the market. For now, it feels as if there’s always going to be someone else prepared to pay more than you to ensure an entry ticket to the bull run.”
As for what could “possibly spoil the party,” Morrison noted that “Today brings a clutch of Fed speakers, adding to those from earlier in the week, all topped off by Fed Chair Jerome Powell. It seems unlikely that any of these will want to unsettle the mood by, for instance, expressing undue concern over a rebound in inflation, or a potential collapse in the labor market. Instead, it’s likely they’ll provide an overall positive message.”
Regarding the latest data releases, Morrison highlighted that “Weekly Unemployment Claims continue to trend downwards, while the Final GDP update is unlikely to upset the market.”
Morrison was correct on this front, as Thursday’s third and final reading of second-quarter GDP from the Bureau of Economic Analysis showed that the economy grew by 3.0% between April and June, unchanged from its previous estimate. The data aligned with economist expectations and had little effect on asset prices.
“The only issue causing some doubt amongst investors seems to be whether the Fed will cut rates by an additional 50 or 75 basis points by year-end,” Morrison said. “If any investors are concerned about high levels of debt, federal or otherwise, they’re keeping their opinions to themselves. And why not? Neither candidate in the upcoming Presidential Election is keen to address it. Instead, both blithely talk about their spending plans.”
And briefly touching on gold’s new ATH, Morrison noted that “This is turning out to be a good month for gold.”
“It began on the back foot after traders returned from the US Labor Day holiday and sent prices down to the lower end of a month-long trading range. Since then, it has rallied 8%, and closing in on $2,700,” he highlighted, before warning that a correction may be in order following the recent gains.
“Gold has come a long way without a significant pullback, and only a brief period of consolidation so far this month,” he said. “The daily MACD is positive in that momentum is to the upside, although it’s heading into ‘overbought’ territory. We should get a pullback, but that doesn’t mean we will, and it doesn’t tell us ‘when’ either.”
Morrison said it “will be the size and speed of any future pullbacks which will provide clues as to where gold goes next. Is it getting ready to top out? Or are we going to see something similar to the rally from 2009 to 2011?
And regarding silver, he said it “is really getting interesting now. It rallied close to 5% on Tuesday, fell yesterday, and was up around 2% this morning. It is now retesting resistance around $32.50. If it can break through and hold above here, then further gains seem possible.”
