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Resilient US job and inflation data, coupled with steady inflows into spot Bitcoin ETFs, has supported Bitcoin’s rally above $60,000. Between August 21 and August 22, Bitcoin’s price increased by 4% and has managed to maintain support around the $60,000 level. However, some analysts suggest that surpassing the $62,000 resistance would be necessary to confirm a bullish trend. Despite a loss of momentum, the market remains optimistic about Bitcoin’s prospects due to expectations of expansionary measures by the US Federal Reserve (Fed).
Bitcoin analyst Decode highlights the need for Bitcoin (BTC) price to break above the 200-day moving average at the monthly close to reestablish a bullish trend. Decode notes that while Bitcoin has recently lost momentum, there is optimism for a rebound in the fourth quarter.
In the near term, expectations are high that the Federal Open Market Committee (FOMC) will lower interest rates at its meeting concluding on September 18 with 0.50% rate cut, considered aggressive, would likely benefit risk-on markets, while even a 0.25% cut would signal that the peak of monetary tightening might be over.
In contrast, traditional assets like the S&P 500, which is nearing its all-time high, and gold, which recently reached a record value, show stronger performances compared to Bitcoin. Bitcoin remains approximately 16% below its June 2024 peak. This gap reflects different risk perceptions, as stocks benefit from dividends and gold is seen as a reliable hedge, whereas Bitcoin is still establishing its role as a diversified asset.
Global gold ETFs manage $246.2 billion in assets, whereas spot Bitcoin instruments, including ETFs and ETNs, hold $66.6 billion. Despite Bitcoin’s features of censorship resistance and a fixed monetary policy, it has yet to fully integrate into traditional financial markets.
Recent inflows into spot Bitcoin ETFs, which saw $226 million in net inflows during the four days ending August 21, indicate growing interest. Additionally, the upcoming US presidential elections may bring a more favorable regulatory environment for the cryptocurrency sector. As long as US economic data remains stable or positive, the possibility of a less stringent monetary policy from the Fed could further bolster Bitcoin’s chances of surpassing the $62,000 mark by year-end.
