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Bitcoin Target of $120k Draws Closer as Fed makes a Choice

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Analyst Sees a Bitcoin Market Shift — Here’s What’s Happening
Analyst Sees a Bitcoin Market Shift — Here’s What’s Happening

The key takeaways

  • Net withdrawals of 44,000 BTC in September decreased the amount available and eased the pressure to sell.

  • US-listed Bitcoin ETFs have added $2.2 billion. This is a sign of a persistent demand for Bitcoin that exceeds its mined supply.

BitcoinBTCInvestors are awaiting the Federal Reserve of America’s Wednesday interest rate announcement. The immediate effect of a cut in interest rates on Bitcoin’s price is still uncertain. However, three independent factors continue to support the BTC prices.

BTC Estimated: Total amount of Bitcoins held at exchange addresses. Source: Glassnode

A sharp fall in BTC holdings on exchanges is crucial for the short-term formation of prices. Glassnode reports a withdrawal of net 44,000 BTC from exchanges in just September, which reverses the deposit activity that was high during July. Due to the limited number of coins available, liquidity in the short term is less, which may limit selling pressures near current price levels.

Bitcoin ETF demand is increasing despite a reduction in BTC supply

Some people argue that 2,96,000,000 BTC are enough to absorb the volume of buying. This view ignores the fact that many of these coins aren’t listed on order books. Many clients keep Bitcoin deposits on exchanges due to concerns about self-custody You can also benefit from special features, such as reduced rates or yield opportunities.

US-listed Bitcoin ETF net daily flows in USD. Source: CoinGlass

Bitcoin spot exchange-traded fund (ETF) accumulation is a major contributor to the support of $115,000 at this point. Investor confidence has been restored after gold outperformed by 11% in the past year. US-listed Bitcoin Exchange Traded Funds (ETFs) recorded $2.2 Billion in revenue during 2018. net inflows The daily purchasing pressure is 10 times higher than the new Bitcoin mining each day between Wednesday and Sunday.

Eric Trump CNBC interview On Tuesday, drew the attention of Bitcoin’s special qualities. US President Donald Trump’s son, Eric Trump is personally involved as the founder of Bitcoin mining and treasury company American Bitcoin. Eric Trump claimed that Bitcoin was the future. “greatest asset of our time,” It has been described as a “modern version” of gold that is an effective hedge for the weakness of the real estate industry.

Bitcoin may not respond to Fed rate reductions

Markets are pricing in 96% probability of the Fed’s decision. trim rates to 4.25% This is a slight increase from the 4.5% currently in place. Bitcoin may react moderately to the announcement on Wednesday. Jerome Powell’s remarks at his press conference are more likely to signal whether interest rates will trend downward. Bitcoin’s path towards $120,000 might be blocked if there is a risk of inflation.

FED set an overnight lending rate. Source: Bloomberg / Cointelegraph

A new financial sign emerged in the past week which could indicate greater market tensions. US banks reported a drop in profits on Monday borrowed Reuters attributed the Fed’s decision to remove $1.5 billion in standing repo facility funds. “tightness in meeting funding obligations.” The overnight lending rates rose also to 4.42%, which is the highest rate in more than two months.

The uncertainty caused gold to surge, reaching a record high on the day. Bitcoin prices could surge past $120,000 despite the Fed’s precise decision regarding interest rates. This is due to demand increasing via spot ETFs. corporate reserve strategies, and its role as an independent hedge — an advantage reinforced by Eric Trump’s remarks.

This is a general article and not intended as investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.