With over 10% gains in September 2024 so far, Bitcoin price has beaten the average 5.6% returns in September over the past decade. Global rate cuts to will benefit Bitcoin amid huge liquidity pump.
The world’s largest cryptocurrency Bitcoin BTC $106 583 24h volatility: 0.5% Market cap: $2.12 T Vol. 24h: $20.62 B is showing major strength furled by the global rate cuts this month. Bitcoin price has surged more than 3.5% in the last 24 hours and is currently trading at $65,213.85 with a market cap of $1.288 trillion. Also, the daily trading volumes have surged by 50% showing strong investor interest.
Following the 50 basis points rate cut by the Fed in mid-September, the Chinese central bank PBoC also announced a rate cut with $140 billion in liquidity infusion. This money surplus seems to be coming into Bitcoin as the asset class prepares for the best September closing in the last decade. The last time, BTC gave strong double-digit returns in September was in 2012.
Photo: Bloomberg
In its history, Bitcoin has shown a strong correlation with macro indicators. Sean McNulty, director of trading at liquidity provider Arbelos Markets told Bloomberg:
“Bitcoin’s correlation with monetary policy continues to be highest with respect to the Fed. Other central banks easing certainly helps too.”
Some market analysts also believe that the $65,000 level could prove to be a bit stuck considering Friday’s Bitcoin options expiry. Later today, $5.8 billion worth of Bitcoin options are set to expire with a put call ratio of 0.64 showing that bulls are dominating the expiry. Chris Newhouse, director of research at Cumberland Labs said:
“We’re at $65,000 levels now, and slowly testing higher, either we break out and maintain that as a new level of price discovery, or we don’t break higher and see a sharp decline.”
Crypto analytics platform Santiment reported that this is the first time since August 1st that BTC price has surged past the $65,000 mark. A key factor behind the price surge has been consistent accumulation by large holders, including whales and sharks. Over the past six months, wallets holding 10 or more BTC have amassed a total of $4.08 billion worth of Bitcoin, helping to prevent any sustained downturns in the market.
Spot Bitcoin ETF Inflows Pick Up amid BTC Price Surge
On Thursday, September 26, the US spot Bitcoin ETFs recorded a massive $365 million worth of inflows, the highest single-day flows in September. With this, the ETFs have seen six consecutive days of inflows showing that the institutional interest in Bitcoin is picking up ahead of the Q4 bull run.
The Ark Invest Bitcoin ETF (ARKB) led the club with $113 million in inflows, followed by BlackRock’s IBIT which saw $93 million in inflows. Also, the trading volume for IBIT was at a staggering $1.52 billion.
Following the global rate cuts, investors have turned bullish expecting the BTC price to surge to $100K and beyond in Q4. BitMEX CEO Arthur Hayes stated that a volatility supercycle could lead to a major BTC rally ahead.
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