Key Points
- Bitcoin (BTC) price has rebounded significantly following signals of a potential interest rate cut by the Federal Reserve Chair, Jerome Powell.
- The rising adoption of Bitcoin by institutional investors and anticipated economic shifts are further fueling this surge.
After Jerome Powell, the Federal Reserve Chair, hinted at a possible interest rate reduction in September, Bitcoin (BTC) price experienced a significant rebound over the weekend.
Bitcoin ended the previous week trading slightly above $64k, a roughly 10% increase from the closing price of the week before.
Technical Indicators
From a technical perspective, Bitcoin’s price has consistently closed above the daily 50 and 200 Moving Averages (MAs) in recent times, despite the presence of their death cross.
Moreover, the daily Relative Strength Index (RSI) has bounced back above the 50% mark, indicating that bulls are gradually gaining control following the crash on August 5.
A market rebound, led by Gold and traditional stock indexes, has signaled a likely bull rally for the entire crypto industry.
Adoption by Institutional Investors
The crypto industry has achieved considerable regulatory clarity in several major jurisdictions, including the United States, Russia, Hong Kong, India, Europe, and Singapore.
The approval of spot Bitcoin and Ethereum ETFs in the United States has encouraged other jurisdictions to follow suit.
For example, Brazil has already approved two spot Solana (SOL) ETFs, while Hong Kong, Canada, and Australia already have spot BTC and Ethereum ETFs.
According to recent 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 have exceeded $550 million over the past two weeks, signaling a further bullish outlook.
The significant accumulation of the US spot Bitcoin ETFs recently has coincided with a notable decrease in the supply of BTC on centralized exchanges (CEXs).
Interestingly, the supply of stablecoins on CEXs has continued to rise significantly, suggesting an increase in overall buying power.
Anticipated Economic Shift
The forthcoming US elections and expected changes in monetary policy will play a significant role in Bitcoin price action.
More than 115 days since the fourth Bitcoin halving, BTC price action is nearing the breakout zone, similar to previous bull cycles.
The US Fed is expected to initiate the first interest rate cut from next month since the onset of COVID-19, signaling a major economic shift.
According to Fed Chair Powell, inflation has significantly eased without a noticeable spike in unemployment, suggesting a need for an economic shift for the next five years.
As a result, Bitcoin price is expected to benefit significantly from the increasing global liquidity among other factors.
