Bitcoin (BTC) Reclaims $80,000 As Fed Cools Rate Hike Expectations

Bitcoin (BTC) reached another multi-month high after reclaiming $80,000, climbing to $81,749 on Thursday after Federal Reserve Governor Christopher Waller tempered expectations of a September rate hike.

However, the flagship cryptocurrency lost momentum after hitting a key resistance zone. If BTC holds above $80,000, it could target a move past $83,500 and confirm a falling wedge breakout.

Bitcoin (BTC) Back Above $80,000 After Rate Hike Odds Drop

Bitcoin (BTC) is currently trading around $80,826, up almost 4% in the past 24 hours. The rally helped the price overcome recent weakness and retest levels that halted its August rally. Buyers must convert $80,000 into support to sustain the latest breakout.

The reversal came after Federal Reserve Governor Christopher Waller cooled immediate expectations of a rate hike after the September FOMC meeting if incoming inflation data is favorable. However, he did not rule out a hike if inflation numbers come in higher. Waller’s comments put the focus on the upcoming August Consumer Price Index (CPI) data, making it a factor in whether interest rates remain stable or are raised higher.

Additionally, two- and ten-year Treasury bond yields fell, and the dollar weakened, creating a conducive environment for Bitcoin and other risk assets.

Corporate Demand Provides Additional Support

Returning corporate demand helped support Bitcoin’s latest resurgence. Strive CEO Matt Cole revealed the company could purchase over 20,000 BTC by the end of the year, helping shore up sentiment around the asset. The company disclosed a 1,800 BTC purchase earlier this week. The purchase was completed at an average price of $79,431, taking Strive’s total holdings to 23,156 BTC.

Capital-B, a company listed in France, raised €7.6 million through a private placement from Blockstream CEO Adam Back. The company disclosed it will use the proceeds from the raise to fund a 376 BTC acquisition. Returning corporate demand indicates renewed institutional confidence in the asset and suggests companies are buying and holding BTC on their books as a reserve asset again.

Weakening Dollar Pushes Bitcoin (BTC) Higher

Besides the Fed’s comments and declining Treasury bond yields, a weak dollar has also helped Bitcoin and the broader cryptocurrency market push higher. BTC’s move higher comes against the backdrop of a strengthening Japanese yen (JPY), which some reports state is likely due to central bank intervention.

The USD/JPY pair fell to 158.5 on Wednesday before sliding further to 155.4 on Thursday. This had a domino effect and put pressure on the US Dollar Index (DXY), pushing it down to 99. However, the suspected central bank intervention to prop up the yen has revived concerns about a carry-trade unwind. News outlet The Macro Paper commented on the probable intervention, stating:

“In the last 24 hours, USD/JPY has dropped almost 2.5%, which doesn’t happen without any major intervention. On top of that, BOJ is most likely expected to hike rates this month, with more rate hikes possible in Q4. This is the exact thing that happened in Q3 2024, when BOJ intervened and hiked rates together.”

Can Bitcoin (BTC) Overcome Key Resistance Zones

Bitcoin’s revival sees the cryptocurrency retesting the $81,000 to $82,500 zone that capped its August rally. A close above these levels could confirm a breakout and push the price towards $85,000. One analyst, Franklin, identified $83,450 as a key support level, adding that BTC was testing a falling wedge breakout. However, the price must close above resistance levels to confirm a breakout.

Momentum has strengthened as well, with the fear and greed index at 78 and the relative strength index (RSI) above 70, a level typically associated with overbought market conditions. Additionally, BTC is trading above all four moving averages on its daily chart (20-day at $74,775, 50-day at $68,489, 200-day at $69,602, and 100-day at $66,334). Bitcoin has also broken above the upper Bollinger Band on the 4-hour chart. This confirms substantial upside pressure, but could also suggest price action is getting stretched.

A look at CoinGlass’ liquidation heatmap shows that BTC has cleared several short clusters between $78,000 and $80,500. This likely triggered forced buying as traders closed their positions, accelerating upward momentum. The next major cluster sits between $81,300 and $81,600. If the flagship cryptocurrency clears this level, it could push towards $85,000, liquidating smaller clusters along the way. Meanwhile, downside liquidity is concentrated between $76,400 and $79,800. If the price falls below $80,000, it will likely drop towards these levels.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.