Bitcoin Price Surges Over 2.5%, Reaches September High of $27,400 Amidst Potential Pause in Interest Rate Hikes and Institutional Interest
Summary:
Bitcoin (BTC) experiences a price surge, rising over 2.5% to reach a September high of $27,400. Factors contributing to the increase include the potential pause in interest rate hikes by the Federal Reserve and growing institutional interest in Bitcoin. BTC supply on exchanges continues to decrease, signaling a bullish trend. Despite a sense of fear in the market, short-squeezes and higher BTC prices remain possible. Please note that this news does not provide investment advice.
Bitcoin (BTC) has experienced a price surge today, increasing by over 2.5% and reaching a September high of over $27,400. This rise in price comes after a relatively stagnant weekend where BTC maintained the important $26,000 level, providing reassurance to traders and analysts who consider this level to be pivotal.
The upward movement in Bitcoin price is attributed to several factors. The recent Consumer Price Index (CPI) report unveiled that inflation rose to 3.7% in August, surpassing the previous month's figure of 3.5%. The annual core CPI, which excludes food and energy, indicated positive data with August's value standing at 4.3%, slightly lower than the 4.5% jump in the previous month. This suggests that there is hope that inflation will reach the United States Federal Reserve's 2% target, potentially leading to a pause in interest rate increases at the Federal Open Market Committee (FOMC) meeting on September 20. Investors view such an outcome as beneficial for risk-assets like Bitcoin.
CME Group, a derivatives marketplace, has provided evidence that there is a high probability of the Federal Reserve halting interest rate hikes. This finding, coupled with public sentiment and confidence in the pause, has fostered the belief among investors that it may pave the way for a broader recovery in the crypto market.
Moreover, institutional interest in Bitcoin has significantly contributed to the positive market sentiment. Several large institutions have filed for Bitcoin ETFs, following the U.S. Court of Appeals Circuit Judge Neomi Rao's ruling in favor of Grayscale Bitcoin Trust (GBTC) on August 29, in their legal battle against the U.S. Securities and Exchange Commission (SEC). BlackRock and Fidelity Investments are among the companies displaying growing interest in Bitcoin, with both having experienced delays in the approval process for BTC spot ETFs. Franklin Templeton, a $1.5 trillion asset manager, filed for a spot Bitcoin ETF on September 12. Despite numerous applications, including those from BlackRock, Fidelity, Cathie Wood's ARK, and 21Shares, the SEC has thus far declined to approve a spot Bitcoin ETF. The next decision deadline is October 16, although another extension is highly likely.
Meanwhile, as Bitcoin's price continues to rise, the supply of BTC on exchanges remains below the monthly peak observed on September 4. During this period, crypto exchanges have witnessed a decrease of more than 40,000 Bitcoin. This reduction in available supply for spot selling is regarded as a bullish signal for Bitcoin. Furthermore, as Bitcoin leaves exchanges, liquidations can exert a substantial impact on the price. In the last 24 hours alone, over $28.4 million worth of BTC shorts have been liquidated, with an additional $27.9 million in shorts liquidated within a 12-hour timeframe. Although short-sellers have been experiencing losses, 50% of the futures market maintains a short position on Bitcoin price. Consequently, the possibility of a short-squeeze and further price increases for BTC is on the horizon.
Despite displaying some bullish momentum in the short term prior to the FOMC meeting, the Bitcoin Fear & Greed Index continues to indicate "fear." Nevertheless, it has shown slight improvement compared to the previous month.
Please note that this article does not provide investment advice or recommendations. It is essential for readers to conduct their own research and assessment when making investment decisions.
Published At
9/18/2023 1:43:13 PM
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