Cryptocurrencies Reach Key Levels: What Supports the Current Bullish Trend?

After a period of volatility, the digital asset market shows signs of stabilization. Bitcoin is positioned near $90,000, while Ethereum recovers the $3,000 zone, driven by a confluence of macroeconomic factors and monetary policy expectations. Is there a solid foundation for this bullish trend to continue in the short term?

Positive Macroeconomic Data Boost Investor Confidence

Recent US economic indicators have surprised to the upside. Initial unemployment claims stood at 216,000 (below estimates of 225,000), reaching the lowest level since mid-April, reinforcing the narrative of labor market stability. Although the Producer Price Index (PPI) showed pressures in some sectors, the core PPI remained at 2.6%, its most moderate reading since July 2024.

This positive environment has benefited multiple asset classes. US stocks reached two-week highs, with the S&P 500 and Nasdaq showing broad strength. Companies like Dell advanced nearly 6%, while the tech sector maintained its momentum. This risk appetite has spilled over into the cryptocurrency market, where leading assets respond positively to the improved global sentiment.

Rate Cut Expectations Increase Probabilities

The Federal Reserve has signaled a shift in its stance. The recent Beige Book indicated that economic activity remains stable but with signs of a softer labor market. More importantly, several key Fed officials, including regional authorities, have expressed willingness to implement rate cuts in the near term.

CME FedWatch data shows an 84.9% probability of a 25 basis point cut in December, while Polymarket reflects an 83% confidence in this scenario. JPMorgan has revised its projections, now expecting rate reductions in December and January of next year. This anticipated monetary easing increases the appeal of digital assets, which have historically benefited from environments of expansive liquidity.

Massive Liquidations Prepare the Ground for an Upside Move

In the last 24 hours, the market experienced liquidations totaling $323 millions in leveraged positions, with Bitcoin accounting for $133 millions of these forced closures. Although these numbers may seem negative, analysts interpret them as a “market purge” that eliminates overly leveraged speculators. The drop in total open interest from $45 billion to $28 billion represents the largest reduction in the current cycle, potentially laying the groundwork for a more sustainable push.

Institutional Capital Flows Support the Recovery

US-based Bitcoin and Ethereum ETFs have recorded consecutive net inflows over the past two days, totaling (millions and )millions respectively. Meanwhile, investment institutions have launched new products: Grayscale offered ETFs for XRP and Dogecoin, while Bitwise introduced its Dogecoin ETF on the New York Stock Exchange. This movement suggests that institutional capital has not completely exited the sector but is taking advantage of depressed levels to re-enter.

Technical Analysis and Price Expectations

The analyst community offers varied but generally constructive perspectives. Tom Lee of BitMine projects that Bitcoin could reach its all-time high of $125,100 before the end of the year. Mike Novogratz maintains his $100,000 target for December, though he acknowledges significant selling pressures at that level. Conversely, Delphi Digital’s analysis identifies a bullish scenario that requires confirmation with a break above $103,500 to rule out a deeper corrective pattern.

Options traders currently expect consolidation in the $85,000-$90,000 range, betting on continuation rather than explosive moves. 4E Lab highlights the return of old whales to Bitcoin and renewed institutional interest in Ethereum as moderately bullish indicators.

The Verdict: Favorable but Fragile Conditions

The current bullish trend rests on solid pillars: improving macroeconomic data, high probabilities of rate cuts, a purge of leverage, and positive institutional flows. However, its sustainability depends on additional liquidity being sufficient to sustain demand beyond the next $103,500. While sentiment has improved from previous extreme panic, current Bitcoin levels $149 $90.77K$139 and Ethereum ($3.12K) reflect a market still trading cautiously, awaiting confirmation that this recovery is the start of a new bullish cycle or merely a technical rebound within a broader downtrend.