What’s Driving Bitcoin’s Price Increase Today?
Bitcoin (BTC) surged by 4% in the past 24 hours, surpassing $86,000 on March 20, briefly touching an intraday high of $87,470. Several key factors have contributed to today’s price increase, including positive signals from the Federal Reserve and increased accumulation by long-term Bitcoin holders.
Key Factors Behind Today’s Bitcoin Price Rise:
- Federal Reserve’s dovish stance boosting risk assets.
- Increased accumulation among long-term Bitcoin holders.
- Technical bounce from key support levels.
Federal Reserve Calms Market Concerns
The Federal Reserve’s recent meeting provided reassurance to investors, signaling two potential interest rate cuts later this year. Key takeaways from the Fed’s March 19 meeting include:
- Maintaining current benchmark rates and describing tariff-driven inflation as “transitory.”
- Fed Chair Jerome Powell’s reassurance that recession risks remain low.
- Lowered growth forecasts, fueling bond market rallies and expectations of future rate cuts.
- President Trump’s renewed calls for rate cuts further supported market optimism.
Lower interest rates typically benefit risk assets like Bitcoin by reducing the opportunity cost of holding non-yielding investments.
Long-term Bitcoin Holders Accumulating
Bitcoin’s price increase coincides with growing accumulation among long-term holders (LTHs), defined as entities holding BTC for over 155 days. Recent data indicates:
- Reduced selling pressure from LTHs, as shown by a slowdown in the Binary Spending Indicator.
- Increased willingness among LTHs to hold rather than sell, suggesting a shift away from distribution.
- A brief spike in LTH selling occurred during recent price lows, but overall selling pressure remains balanced by new demand.
Glassnode analysts suggest that long-term holders may have largely completed their selling activity within the current price range, potentially supporting further price stability.
Technical Support Fuels Bitcoin Bounce
Bitcoin’s recent price action also reflects technical factors:
- BTC has been trading within an ascending channel since March 9.
- The cryptocurrency recently bounced off the channel’s lower boundary, marking the third successful test of this support.
- Previous tests of this support resulted in gains of approximately 7.5% and 6.6%, with the current bounce yielding around 7.6%.
- Immediate resistance is near the channel’s upper boundary and the 200-period EMA at approximately $87,830.
- A pullback could see Bitcoin retesting support levels around $83,900 (50-period EMA) and potentially $82,400 (channel lower boundary).
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
