Bitcoin Price Rises: Key Factors Behind Today’s Surge

Bitcoin surged today, hitting an intra-day high of $58,560, influenced by mixed US economic data, including the PPI and unemployment claims. The liquidation of short positions, amounting to nearly $20 million, has further boosted Bitcoin’s price. Technical analysis shows potential resistance near key moving averages, with possible further volatility expected in September.

Bitcoin’s value surged today, climbing up to an intra-day high of $58,560 from an opening price of $57,335 on September 12. As of the latest figures, Bitcoin was trading at approximately $58,069, reflecting a notable increase of 3.6% over the past 24 hours. Multiple factors are contributing to this upward movement in Bitcoin’s price.

One major element influencing Bitcoin is the mixed economic data released in the US, specifically the Producer Price Index (PPI) figures that came out on September 12, following a surprising slowdown in inflation disclosed by the Consumer Price Index (CPI). The PPI showed a month-on-month growth of 0.3%, slightly exceeding expectations, while the annual figure was lower than anticipated at 2.4%. Additionally, unemployment claims were higher than forecast, with 230,750 claims reported against a prediction of only 227,000.

Investor sentiment had anticipated a 50 basis point interest rate cut by the Federal Reserve at the Federal Open Market Committee (FOMC) meeting set for September 18, but recent data has now diminished those prospects significantly, dropping the odds to less than 15%. Some analysts, like those at The Kobeissi Letter, still argue for a 0.25% cut at the upcoming meeting. Futures markets are reflecting this idea, with an 87% likelihood of such a rate decrease according to the CME Group’s FedWatch tool.

On the technical side of things, Bitcoin’s rally was also supported by the liquidation of short positions, which amounted to about $19.97 million, out of a total of approximately $27.39 million, recorded in the last 24 hours. Such liquidations generally mean the brokers must buy Bitcoin, which often drives prices up. The open interest in Bitcoin has climbed noticeably from $28.30 billion on September 8 to approximately $30.02 billion now, while the funding rate stands at approximately 0.0483%, marking a significant increase since mid-August.

From a charting perspective, Bitcoin’s price movement today marks a rebound following a test of the lower trendline of a descending channel pattern, established around September 6. Analysts observe potential resistance forming at the 50-day and 200-day exponential moving averages (EMA), which meet around $59,500. However, caution is advised as these EMAs could soon suggest a ‘death cross’, which typically indicates further weakness ahead. If such a bearish scenario unfolds, Bitcoin might retest its recent lows near $50,600 later in the month.

Conversely, if Bitcoin can break past the resistance at the EMA confluence, it may see an upward target hitting the channel’s upper trendline, potentially reaching around $68,250 in the coming weeks. Overall market confidence appears to be bolstered by the bullish divergence noted on the relative strength index.

Finally, it’s important to stress that this article is not offering investment advice. The nature of trading in cryptocurrency holds significant risks, and anyone considering an investment should carefully undertake their own research before making decisions.