The price of Bitcoin has had a small rally after yesterday’s speech by US Federal Reserve Chairman Jerome Powell. The price surged above $17,000, driven by the statement that smaller rate hikes are likely imminent and could begin in December.
Ultimately, analysts see a 50 basis point increase in December as almost a close. The FED was just trying not to make it look lenient, but it will come, was the mood of the market.
On Wall Street, the remarks were met with applause. The Dow Jones and the S&P 500 experienced a strong relief rally. This euphoria also spread to the crypto market in a muted form.
Bitcoin was trading at $17,119 at the time of writing and is now facing resistance at $17,197. If this can be overcome, a push into the $17,800 to $18,000 region could be possible, where massive resistance could be lurking.
US institutional demand for Bitcoin is returning
Like CrytoQuant CEO and Founder Ki Young Ju notedrestores market sentiment among major investors in the United States. Ju comes to this conclusion as the hourly BTC price premium on Coinbase turned positive for the second time since the FTX bank run.
The Coinbase Premium Index has long been a reliable indicator of institutional investor sentiment for the crypto community. It also includes institutional investors, of which Coinbase has the majority, according to the report for the third quarter of this year.
The index is rising as a result of increased trading volume on the exchange, indicating a return of confidence in Bitcoin from institutional investors.
Like NewsBTC reported, there is one major concern for the market right now: a possible bankruptcy of Genesis Trading and DCG. However, these rumors have been spreading in recent days. It is assumed that the companies only have a solvable liquidity problem and not an insolvency problem.
Bottom in or more pain?
However, continued selling pressure from a second capitulation of Bitcoin miners within the current cycle looms and is likely to cloud the positive outlook. As we have reportedminer capitulation is in full swing.
According to CryptoQuant, there was about 4,000 BTC of selling pressure added by miners this week. The company’s data shows that miner transfers to exchanges increased as the price fell from about $20,000 to about $16,000.
In addition, miners’ BTC reserves have fallen by 13,000 BTC since the end of August. They are now at about the same level as at the beginning of 2022.
Charles Edwards of Capriole Investments noted:
We are seeing the third highest Bitcoin miner sales of all time. Today’s level of Bitcoin miner stress is only seconded by 2 other occasions. The other 2 times? Bitcoin was only $290 and get this…$2.10!