Why Is Bitcoin Price Up Today? Key Reasons Explained
Within the last 24 hours, the market witnessed a significant rally in the Bitcoin price, which soared by 10% from a daily low of $60,805 to a peak of $68,250. This remarkable price movement can be attributed to several key factors, including yesterday’s Federal Open Market Committee (FOMC) meeting, a notable change in the Coinbase Premium, and Bitcoin’s technical breakout from a downtrend channel.
#1 FOMC Meeting: Dovish Remarks By Jerome Powell Fuel Optimism
As reported yesterday, the macro environment came back into focus for Bitcoin and crypto following the hotter than expected Consumer Price Index (CPI) and Producer Price Index (PPI) inflation data in the US. Investors seemed to have de-risked their positions prior to the FOMC event. However, investors got a favorable outcome.
The pivot point for Bitcoin’s rally can be traced back to the Federal Reserve’s latest FOMC meeting, where Chairman Jerome Powell delivered a speech that the market interpreted as dovish. The Fed’s stance, especially in light of recent inflation data, has reassured investors.
Crypto analyst Furkan Yildirim provided a summary of the FOMC’s key points: “The ‘Dot Plot’ projections show that the median official expects three quarter-percent cuts in 2024 […] The FOMC voted unanimously to leave the federal funds rate unchanged […] The median forecast for PCE inflation remains unchanged at 2.4% for 2024 […] Officials have also raised forecasts for where they see interest rates in the long term.”
The reaction to these announcements was immediately bullish in the traditional finance markets as well as Bitcoin and crypto. QCP Capital, a Singapore-based crypto asset trading firm, highlighted the dovish nature of the FOMC’s stance: “1. In Powell’s press conference speech, he was not concerned about the high inflation numbers in Jan and Feb. 2. In the dot plot, more members shifted their projection to 3 cuts in 2024 (9 members vs 6 in Dec).”
Analyst Ted (@tedtalksmacro) further emphasized the positive implications: “FOMC summary: – 3x rate cuts happening this year despite inflation remaining above 2% (Fed expects core PCE at 2.6%). Growth outlook upgraded. Send it.”
#2 Coinbase Premium Turns Green: A Sign Of Spot ETF Demand
The Coinbase Premium’s shift to positive territory can be identified as another critical factor influencing Bitcoin’s price movement. While yesterday’s ETF flows were negative again for the third day in a row, the Bitcoin Coinbase Premium was a glimmer of hope that spot Bitcoin ETFs will further fuel price.
CryptoQuant analyst Maartunn remarked: “Coinbase Premium is positive again. It’s around +$50. Beautiful.” The Coinbase Premium is crucial for BTC price in recent months as it reflects the demand from spot Bitcoin ETFs before the actual numbers are released one day later. Coinbase custodies eight of 11 spot Bitcoin ETFs or about 90% of the Bitcoin ETF assets as a result. Thus, Coinbase premium is crucial for a continued rally.
Coinbase Premium is positive again. It’s around +$50. Beautiful 😁 https://t.co/YJhYLdbipc pic.twitter.com/Hd3xXsg7Bq
— Maartunn (@JA_Maartun) March 20, 2024
GBTC had $386.6 million worth of outflows yesterday. Notably, Blackrock only had $49.3 million of inflows, Fidelity had $12.9 million. This was one of the weakest inflow days for the leading Bitcoin ETFs so far – a huge disappointment.
But renowned crypto analyst WhalePanda remarked: “We pumped after the FOMC and overall it was better than what boomers expected. Price is now dumping on the news of negative flows but I think they’ll be in for a nice surprise tomorrow.”
Yesterday’s ETF flows were negative again for 3rd in a row.$GBTC had $386.6 million worth of outflows.
Blackrock with only $49.3 million of inflows and Fidelity with $12.9 million.I have a suspicion that the actual flows will only be visible in tomorrow’s numbers.
We pumped… pic.twitter.com/WVTntqG1by
— WhalePanda (@WhalePanda) March 21, 2024
#3 BTC Price Breaks Out Of Downtrend Channel
On the technical front, Bitcoin’s breakout from a parallel downtrend channel has caught the attention of traders and analysts alike. Daan Crypto Trades highlighted the importance of this movement on X (formerly Twitter): “Bitcoin tested its 4H 200MA/EMA and has been holding nicely there and broke out. Still watching this channel which will dictate BTC’s next move.”
#Bitcoin Tested its 4H 200MA/EMA and has been holding nicely there and broke out.
Still watching this channel which will dictate $BTC‘s next move.
Bulls would want to see this consolidate above and not fall back into the channel. pic.twitter.com/94etUo6YAR
— Daan Crypto Trades (@DaanCrypto) March 20, 2024
The chart shared by Daan shows that BTC price has been consolidating in a parallel downtrend channel for more than a week. Yesterday’s surge catapulted the price above the channel. Currently a retest is taking place. If this is successful, the BTC price could rally further north.
At press time, BTC traded at $67,397.
Featured image created with DALLE, chart from TradingView.com
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