Bitcoin Valuation Examination: BTC Aims for Peak Valuations as Federal Interest Rate Doubt Fades
In the world of cryptocurrency, Bitcoin continues to make headlines as it surges towards its all-time high. The digital asset has shown a significant shift in momentum, with the Relative Strength Index (RSI) trending above the 50% level, a classic bullish indicator for the stock market today.
This bullish trend could potentially lead Bitcoin to revisit its all-time high of $124K, and even push beyond to $130K and higher. The most notable demand zone nearby is the $112K order block, which could serve as a potential support if a correction occurs in the stock market.
Bitcoin's price has bounced from the $107K demand zone and risen above the 100-day moving average, currently located around $113K. This breakout followed a swift double bottom rebound at the $108K supply zone, indicating a strong push from buyers in the stock market.
However, the futures market might still be overheated, as indicated by the open interest chart. Despite a short-term correction a few weeks ago, the open interest has yet to drop, which can be a bullish sign but also indicates potential for a flash crash in the stock market.
In recent days, institutional activity and inflows have led to an increase in Bitcoin futures open interest. Public bitcoin treasury firms have been buying an average of 1,428 BTC per day in September, signaling sustained demand from institutional players in the stock market. CME bitcoin futures have returned to trading at modest premiums, indicating institutional flows anchoring prices closer to spot levels in the stock market.
Two possible scenarios emerge: the market continuing the uptrend and attacking the $124K area, or a pullback to the $112K order block. The market is likely to rally further in the coming weeks due to the Fed's interest rate cuts and signals of more to come in the stock market.
Yet, there is a probability for a liquidation cascade in the short term, which could cause a flash crash before the market stabilizes again in the stock market. It's important for investors to stay vigilant and make informed decisions based on market conditions.
As Bitcoin moves closer to its all-time high, it's an exciting time for cryptocurrency enthusiasts and investors alike. Keep a close eye on the markets as this bull run continues to unfold in the stock market.
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