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Fed Rate Cuts Prompt Buying Spree Among Bitcoin Whales
The recent Federal Reserve rate cuts have ignited a wave of confidence among Bitcoin investors, especially the so-called “whales” who hold significant amounts of the cryptocurrency. These large-scale investors have collectively purchased Bitcoin worth over $1.6 billion since the macroeconomic decision was announced on September 18. According to data from the market intelligence platform IntoTheBlock, these whales have accumulated 25,510 BTC since September 19.
Positive Impact of Fed Rate Cuts on Bitcoin
This accumulation trend is not surprising. The 50 basis points interest rate cut has delivered a bullish outlook for risk assets, including Bitcoin. The flagship cryptocurrency is likely to experience a substantial price surge as more liquidity flows into its ecosystem, making it easier for investors to access funds following the Federal Reserve’s quantitative easing (QE).
With Bitcoin projected to see significant upward movements, a rise to $70,000 appears increasingly plausible. The cryptocurrency has already flipped the $60,000 price level from resistance to support following the Fed rate cuts and is currently holding comfortably above this threshold. As anticipated, more liquidity is flowing into the BTC ecosystem, evidenced by the massive $1.6 billion purchase by these whales.
Potential for Bitcoin to Reach New ATH
The milestone of reaching $70,000 is significant for Bitcoin as it could pave the way for the cryptocurrency to hit a new all-time high (ATH). The $70,000 price level has acted as strong resistance since Bitcoin fell below this mark after peaking at its current ATH of $73,000 earlier in March. However, with the added bullish momentum from the Fed rate cuts, Bitcoin could easily break above this resistance this time.
History Could Repeat Itself
In addition to the Fed rate cuts, Bitcoin’s historical trends offer a bullish outlook, suggesting that a rise to $70,000 might occur soon. Crypto analyst Ali Martinez recently highlighted that Bitcoin experienced price increases of 61% and 171% in 2016 and 2020, respectively. Both of these years were halving years, events that reduce the reward for mining new blocks of Bitcoin, thereby decreasing the supply of new Bitcoins entering circulation.
Historical Trends and Future Projections
The analyst further noted that Bitcoin’s price action this year mirrors those of 2016 and 2020. Consequently, history could repeat itself, leading the flagship cryptocurrency to enjoy similar gains. Additionally, the fourth quarter of each year is historically when Bitcoin sees its highest returns, indicating that BTC should witness significant price gains as we head into the last quarter of this year. Moreover, the post-halving rally is around the corner, which could further drive Bitcoin’s price surge towards $70,000.
As of the time of writing, Bitcoin is trading at approximately $63,900, up over 1% in the last 24 hours, according to data from CoinMarketCap.
In conclusion, the recent Fed rate cuts have significantly boosted investor confidence in Bitcoin, particularly among whales. With historical trends and current market conditions aligning favorably, Bitcoin appears poised for a potential rise to $70,000, which could set the stage for new all-time highs.
