Highlights:
Bitcoin (BTC) continues the bullish momentum that has been building up for the better part of the week. At the time of writing, Bitcoin was trading at $91,631.52, up by 5.9% in the day. Bitcoin trading volumes are also on the rise intraday.
When writing, trading volumes increased by 22.35% to $73.11 billion. This is an indicator that buyers are coming in strongly expecting Bitcoin to trend even higher going into the future. The rising optimism in Bitcoin is based on solid factors, all of which could trigger a rally back to new all-time highs.
One of them is the fact that the growing perception is that Bitcoin has bottomed out. Since it hit a low of $82,000, Bitcoin bears appear to have lost strength. They lost strength despite market sentiment at maximum fear, uncertainty around a rate cut, and conspiracy theories around Epstein and Satoshi.
This has triggered a short squeeze as short sellers increasingly provide the market with the liquidity to push higher. As more shorts get liquidated on the way up, Bitcoin could be headed for a parabolic price move. This would be especially the case if Bitcoin manages to breach the $100k mark.
Besides the liquidation of short sellers due to failure at a significant support level, Bitcoin is being pushed higher by rising expectations of a rate cut. The odds of a December rate cut continue to increase, and now sit at over 80%. This has triggered a surge in bullish momentum across all risk-on assets.
Stock indices such as the Nasdaq and the S&P 500 are showing upside momentum, and Bitcoin is following suit. Once the Federal Reserve confirms the rate cut, a rally could follow, potentially allowing Bitcoin to return to its all-time highs.
Bitcoin is also gaining momentum from the fact that capital entering the cryptocurrency market is increasingly concentrated around it. Unlike in the past, when Bitcoin triggered parabolic price rallies for altcoins, Bitcoin is increasingly moving up alone. This means the rising indicators of a cryptocurrency market rebound could drain capital from altcoins and into Bitcoin.
In an environment of lower interest rates, this could send Bitcoin to new highs. Earlier predictions of Bitcoin hitting prices as high as $200k before the end of the year could become reality.
Bitcoin’s potential upside is also supported by data indicating its deepening integration with traditional finance. From institutional avenues for trading, such as ETFs, to corporations adding it to their treasuries, Bitcoin is now a part and parcel of the financial system. The result is that strong dips such as those experienced in 2018 and 2022 are unlikely to happen.
As such, now that it appears to have found strong support at $82k, capital could flow in more confidently. Such capital flow, coupled with Bitcoin’s low supply, could see Bitcoin rally to new highs in the short to medium term.
After a few days consolidating between the $89,085 resistance and $85,895 support, Bitcoin has broken out with substantial volumes. If the momentum continues, the next key level to watch would be the $93k resistance. A rally through this level could trigger a rally to $100k in the short term.
Source: TradingView
On the other hand, if the bulls lose momentum, two scenarios could play out. The first is a consolidation at around $89,085, which now supports. The other is a correction through the $89,085 support, which could see Bitcoin drop back to $82k. Of these scenarios, the odds are higher for a rally to $100k. That’s because of the expectations of a US rate cut, which could keep markets going up in the short term.
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