Bitcoin price rose on Thursday after the Federal Reserve cut interest rates significantly. The bank signaled the start of an easing cycle, but gains were limited by a less optimistic outlook.
The leading cryptocurrency rose 2.9% to $62,121 by 10:45 Riyadh time. Bitcoin also managed to break out of a trading range that was between $50,000 and $60,000. Bitcoin’s ability to maintain this breakout will continue to be monitored during the closing of the four-hour, daily and weekly candles to ensure the upside continues. Data shows that Bitcoin has achieved a weekly gain of more than 7% so far, while Ethereum has recorded a 4.6% increase in the last 24 hours, reaching $2,438.37.
The impact of the Fed’s cut: Cryptocurrency prices rose in general after the Federal Reserve’s interest rate cut decision. However, the strength of the US dollar index affected the overall gains.
Bitcoin followed the positive trend in riskier assets after the Federal Reserve cut by 50 basis points. This cut marked the beginning of the first easing cycle since 2020. However, the optimism was tempered by concerns about the fragility of the US economy, as the 50 basis point cut was at the upper end of market expectations. Federal Reserve Chairman Jerome Powell allayed some concerns, pointing to the balance of risks between rising inflation and a weaker labor market.
Powell’s Interest Rate Expectations and Their Impact on Cryptocurrencies: Powell also indicated that the Federal Reserve has no intention of cutting interest rates to very low levels. He confirmed that the central bank’s neutral rate will be higher than in previous periods, reflecting higher expectations for interest rates in the medium and long term. These comments helped boost the value of the dollar.
Inflows into Bitcoin ETFs Rise
Data from SoSo Value showed that spot Bitcoin ETFs recorded significant inflows. On September 17, 12 ETFs saw net inflows of $186.76 million, up 1,360% from the $12.9 million recorded the previous day.
Inflow breakdown: Fidelity funds led the pack with $56.6 million inflows to its FBTC fund. It was followed by BITB, which recorded $45.4 million, and ARK Invest’s ARK fund, which recorded $42.2 million.
New inflows into Bitcoin funds: HODL and EZBC funds attracted inflows of $20.5 million, $10.2 million, and $8.7 million, respectively.
Additional activity: BTCW saw modest inflows of $3.2 million, marking its first inflows since August 27. In contrast, the remaining five BTC funds, including BlackRock’s IBIT, saw no trading activity.
Increased Trading Volume: According to SoSo Value data, the total daily trading volume of Bitcoin exchange-traded funds increased to $2.27 billion on September 17, which is a significant increase from $1.1 billion on September 16.
Global Liquidity and Its Impact on Bitcoin: Expectations indicate that the Federal Reserve starting to cut interest rates could have a significant impact on the US dollar. The dollar is expected to weaken, which could lead to a new cycle of global credit creation.
Impact of the Cut on Bitcoin: With increased liquidity, Bitcoin could see new financial inflows. This could push the price of Bitcoin to higher levels, with some analysts predicting that the currency could reach $100,000 within 18 months.
Optimism about Bitcoin’s performance after the Fed’s decision: Investor Alden expressed her optimism about Bitcoin’s performance in the next 18 months. She expected the digital currency to see a significant rise due to increased liquidity in global markets.
Bitcoin Price Predictions and Current Situation
Despite her prediction that Bitcoin will reach $100,000, Alden warned that short-term forecasts remain challenging. She also stressed that external factors, such as institutional investment, could significantly impact market movements.
Focus on long-term trends: Alden noted the importance of focusing on long-term trends rather than short-term goals. Bitcoin remains subject to significant price volatility.
Current Bitcoin Status: Bitcoin is currently trading at $59,876.23, down about 0.50%. This came after rising to $61,331, its highest level in three weeks.
Today’s Cryptocurrency Prices: Significant Rise for Altcoins: While low interest rates are positive for riskier assets like cryptocurrencies, prices are unlikely to reach the lows seen during the COVID-19 pandemic. Ultra-low interest rates were one of the primary drivers of the cryptocurrency rally in 2021. However, the industry has faced significant challenges since then. A series of stringent regulatory measures have dampened investor interest. Also, the Bitcoin spot exchange-traded funds launched earlier this year have only given a fleeting boost.
Cryptocurrency Prices Today: Altcoins Gain Notable Boost : Cryptocurrency prices have generally benefited from improved risk appetite. Bitcoin has surged, helping to boost other cryptocurrencies. Binance Coin (BNB) is up 2.06%, while Solana is up 5.5% to $138.6 per token. Ripa is up 1.16%, while Dogecoin is up 2.5%. Other altcoins have also been on the rise, with Avalanche up 9.6% and Bitcoin Cash up 9.8%.
