(Kitco News) – Bull market energy has returned to cryptocurrencies as Friday saw Bitcoin (BTC) bulls finally break meaningfully above resistance at $65,000 for the first time since the beginning of August, with the return to quantitative easing playing a major role in the pan-market rally this week.
“Bitcoin has finally broken out of its consolidation phase and is now making a push toward previous highs of $70,100, with an eye on the all-time peak of $73,750,” said analysts at Secure Digital Markets. “Altcoins are also showing strength, outperforming the broader market as capital flows into this segment, benefiting from the current price momentum.”
“Global risk markets remain bullish as U.S. equities hit fresh all-time highs for the third time this week,” they added, highlighting the impressive run-up in stocks through Thursday. “This rally has been supported by aggressive stimulus measures aimed at revitalizing China’s economy. Chinese tech stocks, particularly beaten-down giants like Alibaba, have surged to their highest levels in over a year following policy announcements from China’s central bank designed to stimulate growth.”
“Traders are now assessing new economic data that signals further progress in cooling inflation,” the analysts said. “The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose by just 0.1% in August, falling short of the expected 0.2%. This data is encouraging and could provide the Fed with more confidence to continue easing interest rates.”
With equities recording healthy gains throughout the week, many traders saw Friday as a good opportunity to book profits, leading to a mixed close for the major indices. At the closing bell, the Dow finished up 0.33%, while the S&P and Nasdaq finished down 0.13% and 0.39%, respectively.
Spot gold also saw profit-taking put pressure on its price on Friday, and at the time of writing, it is down 0.71% on the session to trade at $2,654/oz.
Data provided by TradingView shows that after consolidating near $65,000 overnight, Bitcoin bulls went to work in the morning, rallying to a daily high of $66,561 near midday, BTCs highest price since July 31.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $65,830, an increase of 1.65% on the 24-hour chart.
Bullish energy returns to Bitcoin
“A little more than a week ago (September 17, see chart below), we made clear that if Bitcoin (BTCUSD) broke above July's Lower Highs trend-line (the Descending Triangle's Top), it would be a major bullish break-out for the long-term,” wrote TradingView analyst TradingShot.
“And so it did, and today we witnessed another strong daily rise as the price broke above the August 25 65000 High, cementing and confirming all bullish break-out bias,” he added. “What's even more interesting is that we saw almost the exact same break-out a year ago on October 01, 2023, when BTC again broke above its 1D MA200 (orange trend-line) just after the Lower Highs break-out of an identical Descending Triangle.”
“It is remarkable that the market was also on a 6-month consolidation phase at the time, with a clear Resistance and the 1W MA50 (red trend-line) supporting,” TradingShot noted. “The bottom was priced exactly when a 1D Death Cross was completed, just like the current phase did on August 05.”
“After a quick 10-day consolidation following the Lower Highs break-out, the 2023 fractal then 'attacked' the 6-month Resistance Zone and broke it aggressively, confirming the emergence of a violent Channel Up that, after almost a +200% rise, it would take Bitcoin to March's All-Time High,” he observed.
TradingShot said he expects to see a similar move for Bitcoin in the near future as the return of easy money policies is expected to benefit risk assets.
“With the Fed having started a new Rate Cut Cycle last week with an aggressive -0.50% cut and the U.S. Presidential Elections in November historically being a huge bullish event, there is no reason not to expect a similar rally,” he concluded. “We are expecting to see $95000 towards the end of the year.”
And John Glover, Chief Investment Officer at Ledn, said that while the macro picture for Bitcoin looks little changed when you zoom out, King Crypto appears poised to climb higher through the end of 2024.
“Although the chart below is showing that the prices have us still stuck in the same flag pattern (blue lines) that we’ve been in for months now, what is of interest is the fact that we are testing the top of the channel for the third time,” Glover said in a note shared with Kitco Crypto.
“It’s common to break out of a flag continuation pattern on the third attempt,” he noted. “For those a bit more risk averse, the top of this technical pattern is a good place to take profits on longs, with the intent of re-establishing should we have a 2-day close above the channel. Those with more diamond hands will use a 2-day close above the channel to add to longs.”
Altcoin bulls extend win streak
The return of bullish energy has led to the best performance for altcoins in months, with Friday once again seeing the majority of tokens in the top 200 record gains.
Daily cryptocurrency market performance. Source: Coin360
Notcoin (NOT) was the top performer to close out the work week, gaining 20.3%, followed by a gain of 16.7% for SKALE (SKL) and a trio of 12% gains for meme tokens Bonk (BONK), Pepe (PEPE), and Floki (FLOKI). Popcat (POPCAT) was the biggest loser, falling 10.6%, while cat in a dogs world (MEW) lost 4.4%, and NEAR Protocol (NEAR) declined by 3.6%.
The overall cryptocurrency market cap now stands at $2.31 trillion, and Bitcoin’s dominance rate is 56.2%.
