By
Bena Ilyas
April 29th, 2024
Heightened Bitcoin demand by institutional investors amid the incoming halving event in about six months has kept the bullish narrative alive.
Against all odds, Bitcoin (BTC) price rallied above $27K for the first time In September, thus rejuvenating hopes for altcoin bullish sentiment. According to the latest crypto oracles, Bitcoin price scaled as high as $27.4K on Monday but has since retraced and stabilized around $26.8k during the early Asian market on Tuesday. The sudden Bitcoin spike follows last week’s close on a positive note and upcoming high-impact news later this week.
📊 #Bitcoin's address activity has soared to year highs as the #halving approaches the 6-month mark. The latest community member insight discusses the tight grip that larger holders have on $BTC, and their calm approach while smaller traders get nervous. https://t.co/OS1V8T3b1v pic.twitter.com/uPe4whWHzy
— Santiment (@santimentfeed) September 18, 2023
Top Reasons Why Bitcoin Price Jumped Above $27K
There was no major announcement on Tuesday to have triggered the bullish rally after several weeks of bearish sentiments. Nonetheless, the crypto market has received notable endorsement by institutional investors seeking a hedge against the high inflation. Last week, the European Central Bank (ECB) raised the interest rate for the 10 consecutive time to an all-time high of 4 percent in a bid to tame the rising inflation. Interestingly, the ECB’s projections show that inflation in the region will spike to as high as 5.6 percent.
On Wednesday, the United States Federal Reserve is expected to issue a press conference and provide statements on the economic outlook and the current interest rate. Notably, Wall Street analysts expect the Fed to pause its interest rate hikes at 5.50 percent.
On Thursday, the Bank of England (BoE) is expected to issue an update on monetary policies, and the official bank rate. The two high-impact news coupled with others have a notable effect on Bitcoin price action. Essentially, crypto investors and traders will be monitoring any signal of economic weakness that could trigger a recession in a bid to long the Bitcoin market.
Moreover, Bitcoin has a low annual inflation of about 1.70 percent and is expected to drop by half during next year’s halving event. As a result, institutional investors have continued to show heightened demand for the top digital asset in a bid to hedge against high inflation.
The recent spot Bitcoin ETF frenzy has shown that the long-term bullish outlook stands unwavering. For instance, global investment firm Franklin Templeton joined other fund managers – like BlackRock Inc (NYSE: BLK), and Valkyrie, among others – in applying for spot BTC ETF with the United States Securities and Exchange Commission (SEC).
Notably, the recent Grayscale Investments victory against the SEC significantly rejuvenated hopes for a spot in Bitcoin ETF in the United States within the next year.
Market Outlook
Bitcoin price is likely to retrace towards $25K amid renewed selling pressure from the FTX liquidation plan. Moreover, more crypto fund managers are undeniably under pressure to return profits to investors during the months-long bear market. As of reporting time, Bitcoin had a market dominance of about 50 percent and a daily average trading volume of approximately $15.5 billion.