Bitcoin Surges 10% to $111,999 as Fed Rate Cut Hints Boost Demand

Bitcoin's price surged past $107,000, driven by a combination of institutional demand, ETF inflows, and a shift in macroeconomic sentiment. The weekly candle closed strongly, fueling hopes for a continued upward trajectory. The breakout was not merely driven by hype but by substantial factors including institutional buying, ETF flows, and a more favorable macroeconomic environment. As Bitcoin approaches $120,000, the next significant milestone of $135,000, based on the Fibonacci extension, appears increasingly attainable.

The Federal Reserve's signals of potential rate cuts have significantly boosted risk-on sentiment, propelling Bitcoin to new highs. The cryptocurrency closed at $109,203 last Sunday, marking its highest weekly close ever. The week started with sideways movement around $108,000, but midweek saw a surge as the Fed's June meeting minutes hinted at possible rate cuts as early as July. This news triggered a rally, with Bitcoin setting a new all-time high of $111,999. The momentum continued as Trump's social media post advocating for lower interest rates further fueled the rally, pushing Bitcoin past $117,000.

Investors are increasingly optimistic about a softer monetary policy, which historically benefits assets like Bitcoin. Spot Bitcoin ETFs experienced massive inflows, with $1.69 billion pouring in between Monday and Thursday. Thursday alone saw $1.18 billion in inflows, the highest single-day inflow since November. This influx of capital indicates strong institutional interest and confidence in Bitcoin's future performance.

Behind this rally is a surge in institutional demand. Japanese investment firm Metaplanet added 2,205 BTC to its holdings, while Blockchain Group acquired another 116 BTC. Real estate giant Murano Global announced plans for a $500 million Bitcoin treasury. These moves are strategic and calculated, reflecting deep conviction in Bitcoin's potential. Elon Musk's social media comments further boosted confidence, with his support for Bitcoin adding to the positive sentiment.

Selling pressure remains low, with only 18,000 BTC moving to exchanges on Thursday, the lowest since April 2015. This scarcity, combined with rising demand, sets the stage for significant price movements. Whales have also reduced their activity, with fewer large transfers hitting exchanges. The daily amount sent in 100+ BTC batches dropped to 7,000, down from 62,000 in November. This supply shrinkage, coupled with increasing demand, could trigger a powerful short squeeze. On Thursday, over $1 billion in shorts were liquidated, with another $700 million at risk. A push past $120,000 could set off a violent short squeeze, potentially sending BTC towards the $135,000 Fibonacci extension.

The $135,000 target is based on the 161% Fibonacci extension level, a key resistance point for Bitcoin. If the price stalls at this level, it could indicate a period of consolidation before the next significant move. This target is supported by long-term Fibonacci extensions and cycle projections, suggesting a substantial rally for Bitcoin. The next resistance level sits at $118,000, which also coincides with the 161% Fibonacci extension. If Bitcoin's price stalls here, it could indicate consolidation, but a break through this level could pave the way for a rally towards the $135,000 target.

While the potential for Bitcoin to reach $135,000 is promising, the cryptocurrency market's volatility poses challenges. Investors should be aware of the risks and conduct thorough research before making investment decisions. The technical analysis suggests a strong possibility of reaching this target, but market conditions can change rapidly. The combination of institutional demand, ETF inflows, and favorable macroeconomic signals positions Bitcoin for a significant rally, with the $135,000 target within reach.