Bitcoin has reached a notable high of $70,000, marking a significant recovery from its year-to-date low of $60,000. This increase aligns with a broader resurgence in both the cryptocurrency sector and the stock market, despite ongoing uncertainties surrounding a partial government shutdown in the United States that commenced recently.
As the shutdown began to impact federal departments, including the Department of Homeland Security, analysts noted that Bitcoin’s price typically remains resilient against political turbulence. The partial shutdown was precipitated by a deadlock over funding which has been complicated by legislative demands stemming from recent tragic events in Minneapolis.
Despite these external pressures, the surge in Bitcoin’s price can be attributed largely to market expectations regarding potential interest rate cuts from the Federal Reserve. Investors have been increasingly optimistic, with data from Polymarket suggesting a rising likelihood of three to four rate cuts before the end of the year. This newfound confidence followed the release of key economic indicators, including a jobs report that indicated a net addition of over 130,000 jobs in January, alongside a decrease in the unemployment rate to 4.3%. Additionally, the Consumer Price Index slipped to 2.4%, down from the previous 2.7%, while core inflation remained stable at 2.5%.
Investor interest has also been piqued by the cautious buying of spot Bitcoin exchange-traded funds (ETFs), with recent data indicating that these ETFs gained over $15 million in assets in a single day.
From a technical standpoint, traders are observing potential bullish indicators in Bitcoin’s price movements. The daily charts show a recovery trajectory with the Percentage Price Oscillator indicating an impending bullish crossover. The Relative Strength Index has shown a shift from oversold conditions, now sitting at a level of 37. Should the upward momentum continue, analysts believe Bitcoin could target its 50-day moving average, projected at $81,000. However, should prices fall below the recent low of $60,000, the current bullish sentiment may be substantially challenged.
With market dynamics shifting and macroeconomic factors at play, Bitcoin’s price trajectory will be closely watched in the coming days as it attempts to build on this recovery.
