The week started with a rebound in Bitcoin after breaking the trend line at $55,800. This was supported by the growth of stock indices, especially tech stocks. However, institutional demand for Bitcoin was declining: US spot Bitcoin ETFs recorded a net outflow of $706.1 million, and the number of daily active addresses fell from 726,380 to 597,560. The middle of the week was marked by the publication of US inflation data, which had a significant impact on the market. Annual inflation fell to 2.5%, which was the lowest since February 2021. This increased expectations for a possible Fed rate cut at the upcoming meeting on September 18. After an initial decline, the markets began to rise, and traders became more confident about the likelihood of a 25 basis point rate cut.
In fact, Bitcoin demonstrated confident growth this past week, trading in the range from $54,379 to $60,625. Since the beginning of the week, the main cryptocurrency has risen in price by 9.23%, reaching $59,960 by the end of the week. Ethreum (ETH) also showed positive dynamics, adding 5.20% and consolidating at $2,416. On Sunday, September 15, Bitcoin (BTC) is trading around $60,000, its price has grown by about 10% over the week. Well-known expert Konstantinas Sizovas analyzed the situation on the market and assessed the prospects for the Bitcoin exchange rate movement over the next seven days.
The main driver of moderate optimism last week, which returned Bitcoin to $60,000, can be considered the anticipation of a reduction in the key rate at the upcoming meeting of the US Federal Reserve. After the publication of data on consumer price growth, investors’ confidence that the regulator will decide to begin easing monetary policy only strengthened. But there is a nuance in this “barrel of honey”: the monthly core inflation (Core CPI index) in the US accelerated from 0.2% in July to 0.3% in August. Therefore, market participants abandoned hopes that the Fed will lower the rate by 50 percentage points at once – the probability of this is significantly lower than a reduction of 25 percentage points. Bitcoin closed the week on a positive note. Having opened the second week of September at a level below $55 thousand, BTC gradually grew and exceeded $60 thousand over the weekend. Thus, Bitcoin rose in price by 10% over the week, almost completely recouping the fall since the beginning of September. Bitcoin is strengthening its dominance in the market: now it accounts for over 56% of the total capitalization of the crypto market. The growth of this indicator indicates that investors consider the situation to be extremely unstable and therefore prefer to transfer capital to the most stable asset on the crypto market. Other cryptocurrencies, although they have started to grow, are not yet demonstrating such a confident trend. Ethereum continues to trade below $2,500, having added only 5% over the week. Solana (SOL) has risen in price by 6%. Among the favorites of the week, Toncoin (TON) can be noted, but it also showed high growth rates against the background of a low base, while in absolute terms, TON is still trading well below the level at which it was before Pavel Durov was detained in France.
In the coming week, the main event that will influence the situation on the market will certainly be the US Federal Reserve meeting on September 18. With the expectation of a rate cut, Bitcoin may overcome the resistance around $62,000 and test $64,000. The market has already priced in a 25 basis point rate cut, so the main focus will be on the Fed Chairman’s rhetoric regarding further monetary policy plans until the end of the year. But Bitcoin is unlikely to hold on – investors are too afraid of continuing inflation and there is not enough positive agenda for the crypto industry itself. Increased volatility can be expected around September 18-19, while the cryptocurrency may reach a local peak on the eve of the publication of the key rate – after all, as you know, the rule “Buy on rumors, sell on news” applies to the crypto market. This assumption is confirmed by the continued low level of the fear and greed index, which remains in the fear zone with rare transitions to the neutral zone. The level of greed or extreme greed that usually accompanies the dominance of bulls in the crypto market is still out of the question.
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