In mid- September, the cryptocurrency market showed notable activity and liquidity, even rivaling the Forex market. Amidst the often-chaotic price swings in the crypto world, a discernible trend emerged. While traders eagerly awaited Bitcoin to break free from the $25,000-$28,000 range, it briefly dipped below $26,750 before returning to what many considered a “fair” price.
There was optimism that the United States Securities and Exchange Commission might ease its stance on Binance.US, following a lawsuit against the cryptocurrency exchange, potentially benefiting the entire industry. Bulls were poised to drive prices higher, but expectations were dashed when the judge rejected the SEC’s request for extensive information and documents from Binance.US. Instead, both parties were encouraged to streamline their evidence requests and allow some shareholders to testify.
The market also heated up in anticipation of the US Federal Reserve’s decision on interest rates. Some investors closely monitored the economic calendar, while others quietly closed their long positions. After the Fed’s announcement, rates began to decline. Although the base interest rate remained unchanged at 5.5%, as expected, it still triggered market concerns.
The decline in US stock indices, notably the S&P 500 and Nasdaq 100, further exacerbated the situation, with large investors pondering the implications of the Fed’s hints at potential rate hikes, impacting both traditional currencies, especially the US dollar, and cryptocurrencies like Bitcoin.
MicroStrategy, a major holding company, made headlines by purchasing $147.3 million worth of Bitcoins during the downturn, spreading their transactions over nearly a month. As of September 27, MicroStrategy held a substantial 158,245 BTC, acquired for $4.68 billion.
Bitcoin’s recent price movements have taken on a cyclical pattern, characterized by rapid surges or declines followed by extended periods of stability. Currently, the market is in one of these stability phases, forming a broader sideways movement.
Key drivers behind Bitcoin’s value rise include expectations of lower inflation, reduced rate hike prospects, a weaker US dollar, and growing stock indices. Although there have been no groundbreaking developments recently, the potential for significant news during this extended period of stagnation remains. If such news coincides with the upcoming halving event, it could unleash a price surge that’s difficult to contain.
In conclusion, the cryptocurrency market currently navigates a horizontal channel with price levels between $25,000 and $31,000. Favorable conditions could lead to a breakthrough above $27,500, aiming for a $31,000 test, while less favorable circumstances may result in a support test at $25,000, potentially leading to a drop to $20,000 unless significant players intervene.