The Breakout from $61k - Reasons for BTC Surge to $65k

Finally, the expected and unexpected happened in the market. Millions were liquidation and millions were made. Someone asked why the market always happens in the most unexpected of days. Now, it's news that's trending.

Let's take a recap of what happened in the market after the drop of bitcoin to $58K. After this dump in the market which favoured a lot of shorters, bitcoin still pulled up to $61k as of 20th.

The market was just so sweet for longers as lot of people started securing slots but was short-lived. The question remained, will bitcoin $61k mark break out or would be rejected? Bitcoin has reached this point over 4 times and have settled for days but refused to breakout due to some manipulations, news and market conditions.

It got to $61k on Wednesday morning and at this point, most traders set their positions for shorts as they thought bitcoin will do the normal correction in the reverse while others positioned on longs as they were still holding on to it expecting a breakout of $61k to $62k and then to $65k.

When such happens, there's always a surge in the price of bitcoin and altcoins as well. Did bitcoin really breakout the $61k mark? Yes, it did break on Thursday afternoon. It started out with this long green candlestick and then, with force, breaks the walls of $61k. It did reach $62k and then retraced back to $61400.

Seeing the retraces, done traders felt it would be the right time to short bitcoin as it may pull back to $59k. Other traders with years of experience knew that once bitcoin breaks that mark, it is longs and longs till $65k before placing another decision on whether it would be rejected or accepted.

Shorters saw the retraces and smiles, knowing bitcoin will do the needful and they'll be in profits. Some traders left the market out of fear that bitcoin may reach $70k and take off. Some are still holding, Manipulations may occur. If the $65k mark is not accepted, we'll see dumps to $59k.

Now, what drove this increase that particular day? Let's see what Fed has to tell us. Remember Fed actually cut the inflation rate from 3% to 2.9% but even at that, there was still a dump and then a pump. What happened?

Bitcoin surged because of the dovish announcement from Federal reserve chair Jerome Powell that the rare has been cut on the horizon. He had this confidence that the inflation rate is growing slowly to attain a sustainable path back to 2% target.

Following his remarks and announcement of the Fed rates cut, the market capitalization of crypto increased by 0.6% to $2.28 trillion. The S&P 500 and Nasdaq gained 1.2% and 1.8% in early trading on Friday while the Dow Jones Industrial Average had an increase to 1%.

This indications of rate cut by Powell ignited serious optimism in the crypto ecosystem. His announcement at the annual Jackson Hole Symposium influenced market dynamics with bitcoin surging above the $63k mark.

Bitcoin experienced a notable surge which shows investor confidence in the potential of the interest rate of US being cut to 2%, creating a more stable environment for crypto. Lowe interest rates reduces the cost of borrowing which encourages investment in digital currencies.

Asides the news, there was an inflow of BTC ETF which was so massive that it could not help but pull bitcoin's legs, dragging it from its position to another.

Even the fear and greed index increased from extreme fear to greed. The optimism was just there. Just look at the surges and greens in the market that day. Personally, I did place a lot of trades with tactics knowing fully well that it would continue for long. The long was just short-lived and unexpected though it has created some highs in the past 24 hours.

News is most times the major contributor to the behaviour of crypto in the market. Now, after this pump there was a dump. But bitcoin was unscathed. Which dump and how did it affect the crypto ecosystem? This would be discussed in my next post.