Bitcoin (BTC), Ethereum (ETH), and other leading cryptocurrencies extend their gains on Monday following a positive weekend. Bitcoin added over 3% to its value in the last 24 hours to briefly hit the $116k mark earlier today.
The positive performance comes amid improving market sentiment, with top analysts now expecting further gains in the coming hours and days.
Bitcoin hits $116k as traders eye the US-China trade talks
Bitcoin, the leading cryptocurrency by market cap, is up by 3.5% in the last 24 hours and briefly hit the $116k mark earlier today. The coin is now trading around $115k as it has slightly retraced from its daily high.
The positive performance comes amid improved sentiment in the market, with altcoins also recording excellent gains.
Adam Livingston, author of The Kobeissi Letter, pointed out that Bitcoin could rally higher over the coming days thanks to the bank cash at the Federal Reserve dropping to about $2.93 trillion. He stated that,
Now reserves are within five weeks of the danger zone, ETFs are hoovering supply, and the scarcity effect is loading in the chamber. This is the mother-of-all liquidity pivots.
Get ready, kids. The next candle will not fit on your log chart.
BREAKING: Bank reserves just punched a hole in the $3 T floor.
Liquidity is bleeding faster than a GameStop short squeeze.
QT is cornered, repo desks are sweating bullets, and the Fed’s only parachute is the money printer set to “infinite.”
Bitcoin is the anti-fragile
According to the analyst, cash levels with the Federal Reserve are approaching what he believes is a danger threshold. This level is where scarcity starts to bite, and policymakers pay closer attention to market functioning.
This level could also see money rotate to the risky assets, with Livingston expecting Bitcoin to be one of the biggest winners in the coming weeks and months.
The market rally is also fueled by the upcoming US-China trade talks. Presidents Trump and Xi are expected to meet on October 30, with a resolution to the ongoing trade war set to positively affect the cryptocurrency market.
Bitcoin bulls set to push price to $120k
The BTC/USD 4-hour chart remains bearish and inefficient, with Bitcoin expected to rally towards the $120k level to gain efficiency in the coming hours or days.
The leading cryptocurrency price found support around the 61.8% Fibonacci retracement level of $106,453 on Wednesday.
It has since added 6.5% to its value and closed the Sunday candle above the 50-day Exponential Moving Average (EMA) at $113,397.
This close saw over $319 million worth of Bitcoin short positions liquidated from the market in the last 24 hours. At press time, Bitcoin is hovering around the $115k mark.
If Bitcoin closes the daily candle above the 78.6% Fibonacci retracement at $115,137, the rally could continue towards the $120k psychological level.
This rally would make the price action efficient on the 4-hour timeframe and target the TLQ at $121k.
The Relative Strength Index (RSI) on the 4-hour chart reads 69, above the neutral level of 50, indicating that the bulls are currently in control.
Additionally, the Moving Average Convergence Divergence (MACD) showed a positive crossover since Friday, further cementing the bullish bias.
However, failure to close above the $115,137 resistance level could see Bitcoin retrace towards the 50-day EMA at $113,397 in the near term.
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