Close Menu
ADVERTISE

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

Bitcoin By
Bitcoin Faces Resistance as Bearish Divergences Emerge
Bitcoin Faces Resistance as Bearish Divergences Emerge

Takeaways from the conference:

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

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

BitcoinBTCSince Friday, the price of ( has been trading in a tight range of 2.3% as investors wait for Wednesday’s Federal Reserve interest rate announcement. 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 Bitcoins 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. 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. However, it 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 net daily flows in USD. Source: CoinGlass

The accumulation of spot Bitcoin ETFs will also help to support the price at $115,000 The trend is helping to restore investor confidence following gold’s outperformance of 11% since August. US-listed Bitcoin exchange traded funds recorded $2.2 billion during the year. net inflows The daily purchasing pressure is 10 times higher than the new Bitcoins that are mined between Wednesday and Sunday.

Eric Trump CNBC interview The unique characteristics of Bitcoin were highlighted on Tuesday. US President Donald Trump is personally investing as the cofounder of Bitcoin mining company American Bitcoin. Eric Trump has said that Bitcoin is the “greatest asset of our time,” It has been described as a “modern version” of gold that is an effective hedge to the weakness in real estate.

Bitcoin could not react to Fed Interest Rate Cuts

Markets are pricing a 96% probability of the Fed’s decision. trim rates to 4.25% From the current 4,5%. Bitcoin’s reaction to Wednesday’s announcement could be modest. 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 has secured overnight funding rate. Source: Bloomberg / Cointelegraph

A new financial sign emerged in the past week which could indicate greater market tensions. US banks released their quarterly earnings on Monday borrowed Reuters said that this move reflected the Fed’s decision to remove $1.5 billion in its Standing Repo Facility. “tightness in meeting funding obligations.” The overnight lending rate rose also to 4.42%, which is the highest in more than 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. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.