Bitcoin dropped briefly on Sunday after U.S. President Joe Biden announced he wouldn’t run for a second term, leading to the liquidation of $159 million in futures contracts, as reported by Coinglass.
However, the decline was short-lived. By early Monday morning, Bitcoin had recovered and even surpassed its previous level, reaching as high as $68,480.36.
Bitcoin’s Current Performance and Market Influences
At the time of writing, Bitcoin has retraced slightly to $67,284.98, but it’s still 0.4% higher than it was 24 hours ago, according to Coingecko data. The cryptocurrency has gained 7% over the past week and has seen a substantial $30.2 billion in trading volume in the last 24 hours.
While President Joe Biden’s withdrawal from the 2024 presidential race was a significant factor affecting investor sentiment, other macroeconomic elements are also influencing the market. On Monday, the People’s Bank of China (PBOC) surprised investors by cutting its short-term policy and benchmark lending rates, a notable move from the world’s second-largest economy.
Source: CME
As investors anticipate the U.S. Federal Reserve’s next Federal Open Market Committee (FOMC) meeting on July 31, current projections suggest that 95% of investors expect interest rates to remain unchanged. However, a significant 92% believe that the FOMC may cut rates following the September 18 meeting.
Bitcoin and Market Reactions to Interest Rate Cuts
Bitcoin often benefits from U.S. interest rate cuts as they make safer investments like treasury bonds less attractive. This shift encourages traders to move more of their assets into riskier investments, such as stocks and cryptocurrencies.
Traders are now focusing on this week’s economic indicators from the Bureau of Economic Analysis to prepare for September. With key data like U.S. GDP and PCE set to be released, market volatility is expected to increase.
BRN analyst Valentin Fournier noted, “With significant macroeconomic indicators such as the U.S. GDP and PCE set to be released this week, we anticipate high market volatility in the coming days. These figures are likely to confirm imminent rate cuts, potentially fueling the current rally.”
Ethereum ETFs Launch Could Boost Bitcoin
The launch of spot Ethereum ETFs in the U.S. is set to begin on Tuesday, July 23, at 9:30 a.m. Eastern Time. This debut could significantly impact Bitcoin’s momentum, potentially driving its price to a new monthly high.
Analyst Valentin Fournier highlighted that while a rapid surge in Bitcoin’s price might not be imminent, the positive effects of ETF inflows could extend the current rally. Fournier noted, “If this trend persists, Bitcoin could cross $70,000 tomorrow with the launch of Ethereum ETFs. Although a parabolic acceleration for Bitcoin seems unlikely at this time, positive ETF inflows could sustain the rally longer than previously expected.”
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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