Key Points
- Bitcoin (BTC) price has reached a six-week high, driven by renewed investor interest.
- Bitcoin’s dominance has increased due to poor performance of recently approved spot Ethereum ETFs in the US.
Bitcoin (BTC) ended last week with a dragonfly Doji candlestick, indicating a decrease in bullish sentiment after a significant rebound in previous weeks.
Despite this, Bitcoin maintained its bullish outlook on Monday, following a pro-crypto rally hosted by Republican presidential candidate Donald Trump over the weekend.
Technical Indicators
Bitcoin’s price reached a daily high of approximately $69,711, suggesting a possible bullish breakout to a new all-time high.
The price of Bitcoin has consistently closed above the 50 and 200 daily Moving Averages (MAs) over the past few weeks.
Thus, Bitcoin’s price is expected to retest the resistance range between $70K and $73K after a period of consolidation.
If Bitcoin consistently closes above $72K, it could reach a new all-time high in the near future.
However, a potential reversal could bring Bitcoin’s price down to the established support level of around $61K before rebounding to the ATH.
This is supported by the observation that Bitcoin’s price has historically turned bearish in August after a bullish July.
Market Dynamics
Bitcoin’s dominance had a weekly close above 56 percent for the first time since April 2021.
The underperformance of the recently approved spot Ethereum ETFs in the US has given Bitcoin a significant boost.
According to recent market data, US-based spot Bitcoin ETTs have seen net cash inflows of nearly $3 billion in the past four weeks.
In contrast, US-based spot Ether ETFs have experienced a net cash outflow of about $341 million since their official launch.
The Grayscale’s ETHE, with net assets under management of about $7.11 billion, is expected to continue its decline due to its high sponsor fee in the coming months.
Institutional investors are heavily accumulating Bitcoin, preparing for further growth.
All indicators point to a likely bullish breakout, with some analysts predicting a parabolic rally during the fourth quarter.
Global Economic Impact
Bitcoin has become a major trading instrument, posing a threat to gold and the US dollar as the global reserve currency.
As a result, more nations are expected to adopt Bitcoin as a long-term insurance policy.
In the United States, both political parties have demonstrated a strong affinity for the crypto community, believed to represent more than 50 million voters.
Following Trump’s comments over the weekend, several Democratic candidates wrote to the DNC asking the party to move away from their anti-Bitcoin stance.
The US Federal Reserve is set to release the highly anticipated interest rate data later this week.
According to CME data, there is a 96 percent chance that the US Fed will keep the interest rate unchanged.
However, there is an 86 percent chance that the Fed will initiate a 25 bps interest rate cut on September 18.
