Key Points
- Bitcoin’s price indicates a bullish recovery due to Federal Reserve’s rate decision and increased demand from institutional investors.
- Institutional investors and nation-states are showing a growing demand for Bitcoin.
Bitcoin’s price has been fluctuating around $58K since July, after establishing a firm support level of approximately $54k. This leading cryptocurrency has been forming a weekly reversal pattern, marked by a potential triple bottom and a rising divergence on the Relative Strength Index (RSI). Additionally, the Bitcoin price in the weekly time frame has rebounded from the rising logarithmic trend, which started in late 2022 following the collapse of FTX and Alameda Research.
However, short-term risks of bearish volatility exist, which could cause the leading cryptocurrency to drop towards the $54k support level again before rebounding towards its all-time high. The recent death cross between the 50 and 200 Moving Averages (MA) in the daily time frame continues to heavily impact the midterm Bitcoin price recovery.
The Increasing Demand for Bitcoin
Despite some short-term holders capitulating, the demand for Bitcoin among institutional investors and nation-states has been gradually increasing. According to on-chain data analysis, Tether, the stablecoins issuer, minted 1 billion USDT in the past 24 hours, indicating rising buying pressure.
The Royal Government of Bhutan has recently disclosed holdings of more than 13k in BTC, valued at over $780 million. This South Asian country joins a growing list of nations accumulating Bitcoin to combat their rising debts. For example, El Salvador’s President Nayib Bukele announced that by 2025, the country will operate without any debt financing plan.
El Salvador has been buying 1 Bitcoin per day in recent months and currently holds 5,875 BTCs, worth more than $331 million. Meanwhile, BlackRock’s IBIT led the US-based spot BTC ETFs with a significant cash inflow on Monday, thus outweighing the cash outflows from Grayscale’s GBTC. The US spot BTC ETFs registered a net cash inflow of about $12.9 million on Monday.
Impact of Economic News
The Federal Reserve is expected to make its first interest rate cut on Wednesday, September 18, after years of waiting for inflation to cool off in the United States. Market sentiments suggest a 69 percent chance that the Federal Reserve will initiate a 50 bps interest rate cut. This move is expected to result in a bullish outlook for Bitcoin’s price, both in the short and long term. Furthermore, the US dollar index is gradually falling as the BRICS nations continue to shift from American bonds to Gold and Bitcoin.
