The anticipated US interest rate cut in September will rejuvenate Bitcoin bulls after more than five months of choppy consolidation below $72K.
After the Federal Reserve Chair, Jerome Powell signaled a possible interest rate cut in September, Bitcoin (BTC) price rebounded over the weekend above crucial support levels. The flagship coin closed last week trading slightly above $64k, up around 10 percent from last week’s close. If Bitcoin price maintains the bullish outlook by the end of this week, the monthly close will most likely be a Doji dragonfly, which signifies the onset of bullish sentiment.
From a technical standpoint, Bitcoin price has consistently closed above the daily 50 and 200 Moving Averages (MAs) in the recent past, despite the existence of their death cross. Additionally, the daily Relative Strength Index (RSI) has rebounded above the 50 percent level, suggesting the bulls are gradually taking control since the August 5 crash.
Bitcoin Price Responds to Rising Adoption by Institutional Investors
The ongoing market rebound – led by Gold and traditional stock indexes – has signaled an inevitable bull rally for the entire crypto industry. Furthermore, the crypto industry has attained significant regulatory clarity in several major jurisdictions including the United States, Russia, Hong Kong, India, Europe, and Singapore.
As Coinspeaker previously noted, the approval of spot Bitcoin and Ethereum ETFs in the United States has influenced other jurisdictions to move in the same direction. For instance, Brazil has already approved two spot Solana (SOL) ETFs while Hong Kong, Canada, and Australia already have spot BTC and ETher ETFs.
According to the latest market data, the US spot Bitcoin ETFs registered a net cash inflow of $252 million on Friday led by BlackRock’s IBIT and Fidelity’s FBTC. As a result, the net cash inflows into the US spot Bitcoin ETFs. For the past two weeks, it has surpassed over $550 million, signaling a further bullish outlook.
The notable accumulation of the US spot Bitcoin ETFs in the recent past has coincided with a notable drop in the supply of BTC on centralized exchanges (CEXs). Interestingly, the supply of stablecoins on CEXs has continued to exponentially rise, suggesting a spike in overall buying power.
Economic Shift
The upcoming US elections amid anticipated monetary policy change will play a crucial role in Bitcoin price action. More than 115 days since the fourth Bitcoin halving, BTC price action is nearing the breakout zone, similar to the prior bull cycles.
#BTC Market Cycle ROI pic.twitter.com/G0Z3RrKZf3
— Benjamin Cowen (@intocryptoverse) August 25, 2024
Meanwhile, the US Fed is expected to initiate the first interest rate cut from next month since COVID-19, thus signaling a major economic shift. According to Fed Chair Powell on Friday, the inflation has significantly eased without a notable unemployment spike, suggesting a need for an economic shift for the next five years.
As a result, Bitcoin price is expected to significantly benefit from the rising global liquidity among other factors.
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