Bull market sentiment returning? BTC breaking through $65,000 is key

Author: BitpushNews

After the Federal Reserve cut interest rates by 50 basis points yesterday, the easing monetary policy boosted market sentiment, with both the US stock market and the crypto market rising.

According to Bitpush data, after the initial volatility triggered by the rate cut subsided, Bitcoin bulls began to exert strength, pushing BTC from the support level of $60,000 up to a high of $63,903 during the session, and as of the time of writing, it has retraced to $62,771, with a 24-hour increase of 4.11%.

Altcoins have shown impressive gains, with dozens of tokens among the top 200 by market capitalization experiencing double-digit increases.

Altlayer (ALT) led the charge with a rise of 42.1%, while Popcat (POPCAT) and cat in a dogs world (MEW) both saw increases of 27.5%.

The overall market capitalization of cryptocurrencies currently stands at $2.19 trillion, with Bitcoin's market share at 57.1%.

At the close of the US stock market, the Dow Jones Industrial Average initially rose by 1.2%, the S&P 500 index increased by 1.7%, both hitting new highs; the Nasdaq rose by 2.5%. Star tech stocks saw widespread gains, with Tesla (TSLA.O) up 7%, Nvidia (NVDA.O) up 4%, and Apple (AAPL.O) up 3.7%.

Bullish Sentiment Returns, BTC's Next Key Level: $65,000

Market analyst Bloodgood stated in his weekly update: "In last week's report, I pointed out that the Federal Reserve was about to enter a steady, slow, and orderly rate-cutting cycle, as the market believed there was a very high likelihood of a 25 basis point cut. However, when the meeting finally took place, the Federal Reserve decided to cut by 50 basis points, which surprised most people. This seems to be better for the market—after all, we are lowering rates faster—but things are not that simple."

"Typically, the expected process of good economic performance is a 25 basis point cut to achieve a soft landing, as a rapid rate cut indicates that the Federal Reserve is worried about a recession, which is not a good sign. It can be said that the last two times the Federal Reserve started a rate-cutting cycle with a 50 basis point cut were in 2001 and 2007."

He noted: "Nevertheless, Powell keeps repeating the word 'recalibration,' trying to emphasize that this is a thoughtful adjustment of 50 basis points, not a panic measure. From the market performance so far, the reaction seems mixed, although very robust economic data has greatly suppressed concerns about a recession."

Bloodgood stated that Bitcoin bulls are able to "break through the key weekly level without falling below the previous low of $49,000," which could be "a sign that the trend is shifting from bearish to bullish."

Analysts believe: "Time will tell, but I am now looking forward to higher prices, which means breaking through $65,000. If we break through, more funds are expected to flow in, and it is possible to reach $70,000 within weeks. If $65,000 is rejected, we may test $60,000 again, and if that fails, we could face months of pain."

TradingView analyst Arman Shaban also emphasized that $65,000 is a key level to watch and leans towards the bullish outcome proposed by Bloodgood based on Bitcoin's past performance.

Shaban wrote: "By analyzing the Bitcoin chart on a weekly timeframe, we can see that, according to previous analyses, Bitcoin has not stabilized below $57,870. After a short-term corrective wave, demand is strong again. Last night, after the Federal Reserve announced a half-point rate cut, demand increased further, successfully rising to $62,500. Now, we must see if the price can break through $65,000 by the end of this week's candlestick. Bitcoin and other altcoins are likely to soon start their major bullish wave, with a mid-term potential target of $80,000."

Previously bearish TradingView analyst Xanrox has also turned bullish after the Federal Reserve's rate cut, believing Bitcoin could rebound to $130,000.

Xanrox stated: "Bitcoin has been consolidating for over six months, but this situation should come to an end. On the chart, we can see a bullish flag, and the price movements in recent days have significantly increased the likelihood of a bullish breakout. Although I have been bearish since May (at $72,000), the recent price movements have changed my mind and shifted me to a fully bullish mode."

He pointed out: "From the perspective of Elliott waves, we are beginning another strong impulse wave (5), and the sideways price movement (wave (4)) seems to be a very complex WXYXZ triple three correction pattern. On the chart, you can see the price movements of the entire bullish cycle starting from $15,476. From a timing perspective, this makes sense, as the timeframe is almost the same as wave (2)."

To determine price targets, Xanrox used Fibonacci extension tools to identify the 0.382, 0.618, 1.000, 1.382, or 1.618 extensions. He said: "Wave (5) is always measured from the beginning of the uptrend to the end of wave (4), and I estimate the target to be around $130,000."

Despite the improved market sentiment, analysts at Secure Digital Markets warn that the timing of the Federal Reserve's rate cut may raise concerns.

They stated: "If economic indicators worsen alongside the rate cut, this could signal deeper economic issues. Traders should closely monitor key indicators such as employment data and leading economic indicators. Historically, significant rate cuts, such as those in 2001 and 2007, have led to major market declines—due to a sharp rise in unemployment, the S&P 500 index fell by over 40% within 350 days during both of those rate cuts."

They concluded: "While this does not necessarily mean the situation will repeat, it is crucial to be aware of these patterns, especially as we experience a rate-cutting cycle. Unlike in recent years, where weak economic data was seen as a positive catalyst for rate cuts, in this environment, worsening data could have the opposite effect, potentially dragging the market lower."