Bitcoin experienced a slight uptick on Thursday, September 18, surpassing the $1,18,000 threshold following the US Federal Reserve’s overnight announcement of a 25 basis points rate cut. The surge in Bitcoin and various crypto tokens propelled the market capitalisation of the asset class up by 2 per cent. In a move that many expected, the US Federal Reserve has reduced interest rates by 25 basis points, indicating the potential for two more cuts as the year progresses.
The recent upward momentum is primarily driven by ETF inflows, bolstered by growing institutional demand and positive expectations regarding Fed rate cuts, indicating a rise in confidence among traders and long-term investors alike. Additionally, check out | American Bitcoin, supported by Eric and Donald Trump Jr., enters the competitive crypto landscape. “The crypto market is absorbing the Fed’s 25 bps rate cut with unexpected tranquility, as Bitcoin is gradually climbing despite initial fluctuations. Traders find themselves divided, with some asserting that the cut had already been factored into the market. “Optimism still points to Bitcoin regaining momentum toward the $120,000 mark if catalysts align,” stated Avinash Shekhar.
In the wake of the FOMC meeting, Ethereum displayed resilience, climbing almost 2 percent to surpass the $4,600 mark on Thursday. Other altcoins such as XRP and Dogecoin experienced notable reactions following the announcement, indicating a potential capital rotation occurring beneath the surface. “Ethereum is showing impressive strength as bulls aim for new record highs, while XRP is energized by optimism surrounding an ETF approval that could push it towards $3.66,” Shekhar added. Avinash Shekhar notes that the crypto market is navigating with caution in light of the recent rate cuts. “Overall, the market is trading cautiously, balancing macro policy signals with sector-specific optimism, and the next move hinges on how traders interpret Powell’s remarks in the coming sessions,” he stated. Investors are keenly observing signals from the central bank’s October meeting to determine if Wednesday’s action indicates the beginning of a broader policy shift or if it is simply a one-off adjustment. Sumit Gupta, asserts that BTC is currently navigating a pivotal range between $117,138 and $119,500. A decisive breakout above this zone could set the stage for new all-time highs as bullish sentiment grows stronger.
“Traders should remain cautious as liquidation heatmap highlights a significant cluster of long liquidations just below the current price.” A retreat into this zone might initiate a wave of long liquidations, intensifying the downward momentum. On the flip side, a significant breakthrough above $118,000 could trigger the liquidation of overleveraged shorts, leading to a swift short squeeze and a notable upward movement. “This setup positions Bitcoin at a pivotal moment for its next big move towards a new ATH,” Gupta said.