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

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Quantum computers could bring lost Bitcoin back to life: Here’s
Quantum computers could bring lost Bitcoin back to life: Here’s

The key takeaways

  • Net withdrawals of 44,000 BTC in September reduced supply and eased short-term potential selling pressure.

  • US-listed Bitcoin ETFs grew by $2.2billion, with a daily demand far exceeding the supply.

BitcoinBTCInvestors are awaiting the Federal Reserve of America’s Wednesday interest rate decision. 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. There are fewer coins, so liquidity is more limited. This could lead to a short-term drop in price near $116,000 at the moment.

Bitcoin ETF demand is increasing despite a reduction in BTC supply

Some claim that there are 2,96 million BTC on the exchanges, which is more than enough to cover all of the buying. The problem with this is that many of the coins in question aren’t listed on any 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

The accumulation of spot Bitcoin ETFs will also help to support the price at $115,000 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 mined per day between Wednesday and Sunday.

Eric Trump CNBC interview The unique characteristics of Bitcoin were highlighted on Tuesday. US President Donald Trump’s son, Eric Trump is a co-founder and investor in the Bitcoin mining company American Bitcoin. Eric Trump has said that Bitcoin is the “greatest asset of our time,” It is described as the modern gold, and an excellent hedge against a weakening real estate market.

Bitcoin may not respond to Fed rate reductions

The bond markets have priced in 96% of the probability that Fed would trim rates to 4.25% From the current 4,5%. 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

This week, however, there was a financial indicator that may indicate heightened market stress. US banks reported a drop in profits on Monday borrowed Reuters reported that the Fed removed $1.5 billion of its Standing Repo Facility. “tightness in meeting funding obligations.” On Friday, the overnight lending rate also rose to 4.42%. This is the highest level in over two months.

Gold prices surged on Tuesday due to this uncertainty. Bitcoin prices could surge past $120,000 despite the Fed’s precise decision regarding interest rates. This is due to the demand for spot ETFs. corporate reserve strategies, and its role as an independent hedge — an advantage reinforced by Eric Trump’s remarks.

The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.