The price of bitcoin (BTC) rebounded more than 1%, reaching a high of $26,438. This increase is the work of several factors, in particular the improvement in investor sentiment. The latter are starting to mitigate the liquidations on the long positions.
Bitcoin (BTC) rebounds thanks to buyers
The market is gradually picking up with a rise on the side of the flagship crypto. The price of BTC fell to $25,000 last week, after a long period of low volatility. Following this massive drop, the Relative Strength Index (RSI) became extremely oversold. Which could be the catalyst for a potential rise in BTC.
According to Dan Morehead, founder of Pantera Capital, the market has seen enough. Bitcoin’s performance this summer has been noticeably dismal compared to other similar periods in the past.
To address this, bitcoin (BTC) buyers have put up a strong defense at the $25,000 support/resistance level. Their goal being to prevent a potential drop to $20,000. This bullish outlook allowed the crypto major to regain resistance at $26,000 and climb to $26,800.
Investors remain optimistic
The US stock market also opened higher on Thursday, with the S&P 500 and Nasdaq Composite gaining 1%. Wall Street’s gains came after the release of S&P Global’s flash U.S. composite PMI. This showed that the economic expansion in August was about to come to a halt.
Indeed, investors are optimistic about the next deceleration in consumer spending. They hope that the US Federal Reserve decides to suspend its rate hikes. A decision that would be absolutely favorable to bitcoin (BTC).
Separately, liquidations on BTC long positions also declined on Wednesday. According to Coinglass, bitcoin saw $37.7 million in total liquidations, including $9.64 million in liquidated long positions. If things continue like this, it could easily hit $28,000.
However, investors should remain cautious. The US Federal Reserve is expected to release its decision on economic policy in September. If it announces larger-than-expected rate hikes, that could dampen bitcoin’s (BTC) advance.
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