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Bitcoin’s $120K target is nearing as the Fed decides.

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Bitcoin and Solana Will Hit Parabolic Levels if Their Cup-and-Handle
Bitcoin and Solana Will Hit Parabolic Levels if Their Cup-and-Handle

The key takeaways

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

  • 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 decision. Although the impact of a rate reduction on Bitcoin is uncertain in the short term, there are three factors that support further BTC gains.

BTC: Estimated total Bitcoin holdings on exchange accounts. Source: Glassnode

A sharp fall in BTC holdings on exchanges is crucial for the short-term formation of prices. Glassnode estimated a net withdrawal in September of 44,000 BTC, reversed the large deposit activity seen from 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 ETFs growing in demand despite reduced BTC supplies

Some claim that there are 2,96 million BTC on the exchanges, which is more than enough to cover all of the buying. This viewpoint ignores that most of the coins in question are not 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 Daily Net Flows, USD. Source: CoinGlass

Bitcoin spot exchange-traded fund (ETFs) continue to accumulate and provide additional support for the $115,000 level. 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 Between Wednesday and Monday represents daily buying pressure that is more than ten times higher than the new Bitcoins mined every day.

Eric Trump CNBC interview On Tuesday, drew the attention of Bitcoin’s special qualities. US President Donald Trump’s son, Eric Trump is a co-founder and investor in the Bitcoin mining company American Bitcoin. Eric Trump claimed that Bitcoin was the future. “greatest asset of our time,” It is described as the modern gold, and an excellent hedge against real estate weakness.

Bitcoin may not respond to Fed rate reductions

Markets are pricing a 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. The remarks of Fed chair Jerome Powell at the press conference will have a greater impact on whether or not rates continue to trend down. Bitcoin’s path towards $120,000 might be blocked if there is a risk of inflation.

FED has secured overnight funding 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 a $1.5 billion cut from the Fed’s 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.

The uncertainty caused gold to surge, reaching a record high on the day. Bitcoin’s price could rise past $120,000 regardless of what the Fed decides on rates. Demand is increasing through 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. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.