Despite some shaky signs on the horizon, Bitcoin is closing in on its most bullish September in over a decade, even with a recent dip that knocked its price down by almost $3,000.
So, what's behind this surprising surge, especially in the latter half of the month? And can this momentum keep rolling?
First up, CryptoQuant has pointed to a significant uptick in net inflows toward spot Bitcoin ETFs. Over the past week alone, these BTC-based products raked in over $1 billion, staying in the green for 13 out of the last 15 trading days. This trend kicked off on September 9, right after Bitcoin's price dipped below $53,000. Coincidence? We think not.
Interestingly, some of these ETF investors have turned into Long-Term Holders, with their supply crossing the 155-day threshold. While this sounds bullish, CryptoQuant warns it's usually a sign that we're in the late stages of a bull market. So, keep your eyes peeled.
Bitcoin's 20% surge from under $53,000 to $63,500 has put many investors back in profit, with the percentage hitting over 90% when the price hovered above $65,000. Short-Term Holders, those holding BTC for 155 days or less, have an average purchase price of $63,000. This means this level could act as solid support, but if these holders decide to cash out, we might see a tumble.
Another red flag? The futures market seems to be getting a bit too hot. Open Interest has ballooned to over $19 billion. Historically, every time it has surpassed $18 billion this year, a price drop has followed. This marks the seventh time, so buckle up.
One thing CryptoQuant missed is the Federal Reserve's recent move. On September 18, the Fed announced a key interest rate cut of 0.5%, the first in over four years. Bitcoin, still seen as a riskier asset, thrives on such news, and the price jumped from $59,000 to over $66,500 in just a week. With more rate cuts possibly on the horizon, BTC could resume its bullish rally and maybe even hit a new all-time high by year-end.
Stay tuned, folks! Jerome Powell, the Fed Chair, is expected to spill more details on the bank's policy later today. With even more rate cuts in the cards, Bitcoin's thrilling ride might just be getting started.
