Bitcoin (BTCUSD) rose more than 1% against the dollar on Monday, indicating a slight recovery after a week that saw it drop more than 10%. In today’s trading, the cryptocurrency was valued at $58,455. Meanwhile, Ethereum (ETH-USD) saw a 1.9% gain, surpassing the $2,500 level.
The massive drop in Bitcoin prices over the past week was accompanied by outflows from spot Bitcoin exchange-traded funds (ETFs). These funds suffered outflows for four consecutive days, resulting in a net loss of around $277 million.
However, there was little correlation between Bitcoin price action and ETF inflows, with positive inflows on Monday and Tuesday despite the price falling from over $64,000 to $58,000. Later, the markets saw larger outflows as Bitcoin’s price remained relatively flat, suggesting that the recent decline may be related to on-chain digital asset exchange activity rather than ETF inflows.
However, trading volumes remained strong, with Bitcoin ETFs recording around $7.7 billion in cumulative trading volume for the week and around $40 billion for the month of August. This remarkable activity, which is different from July and August, reflects strong interest in Bitcoin-based financial products.
Traders are looking to the future amid uncertainty over the path of interest rates and the outcome of the US elections. Should the Federal Reserve decide to cut rates in September, it could have a positive impact on Bitcoin. Most analysts believe that a rate cut would be a bullish catalyst for cryptocurrencies, which are considered riskier assets.
It is worth noting that the cryptocurrency’s price recently tested this level in early August and successfully held above it, in line with historical patterns seen before the asset entered a parabolic rally.
Bitcoin in September: Will Selling Pressure Continue as Volatility Increases?
As September, typically a negative period for Bitcoin, begins, a cryptocurrency expert has suggested that the digital asset could face continued selling pressure amid recent volatility and market uncertainty. Current data suggests that negative sentiment is building, which could prompt more investors to sell their Bitcoin in response to market volatility.
Will Selling Pressure on Bitcoin Continue?
There are growing expectations that selling pressure on Bitcoin, the largest digital asset, will continue. The analyst bases his predictions on the short-term price of Bitcoin to holders, noting a long-term bearish movement around this metric, especially over the past two months. These developments have sparked speculation in the cryptocurrency community about Bitcoin’s near-term prospects.
It is worth noting that recent Bitcoin buying behavior can be estimated using the short-term price of Bitcoin to holders. Since Bitcoin holders tend to sell if the price drops below their entry point, this metric acts as a resistance barrier during downtrends.
The expert points out that Bitcoin has struggled to break this level since 2022, as it is currently trading at $63,250. Therefore, until the cryptocurrency reclaims this area as support, the expectations are for selling pressure to continue, which means a negative behavior for Bitcoin in the near future. If the key support levels are broken, we may see further declines in the price of Bitcoin as a result of selling pressure. Therefore, the expert advises investors to remain vigilant during this period, as these conditions may lead to further losses in the market. If September continues to provide a bearish outlook for Bitcoin, this trend may reinforce the selling pressure given the negative movement of the digital asset in this month over the past ten years.
How could interest rate cuts and elections push Bitcoin price towards $100,000?
Apart from technical indicators, there are a number of economic catalysts that could push Bitcoin price towards $100,000. According to the expert, the market is looking forward to two important economic events that could have a significant impact on Bitcoin price action: the start of the expected interest rate cut cycle in the near future and the US presidential election in November 2024.
The expert noted that “if current economic conditions persist, exceeding $100,000 should be the minimum expectation, especially before the start of the interest rate cut cycle this month and the US election in November. Bullish markets usually translate into positive movements after such events.”
Historically, Bitcoin has responded positively to interest rate cuts, as these cuts create a more favorable environment for riskier assets such as cryptocurrencies. Moreover, markets tend to trend higher after the US election, which could boost Bitcoin’s value. These dynamics make expectations of exceeding $100,000 more realistic in the near future.
However, it is important to take into account the current macroeconomic conditions and recession fears, as they can play a significant role in driving price action. While historical moves remain important, current economic conditions may influence the expected path. On the other hand, optimism about the elections may increase if Republican candidate Donald Trump, who has expressed his support for the crypto space, is elected. Currently, on-chain data suggests that Bitcoin investors need to be cautious about future moves. For example, one crypto analyst noted that capital flows to major assets like Bitcoin have declined compared to stablecoins, indicating increased caution among investors.
