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Recent data indicates a notable increase in Bitcoin demand among U.S. market participants following the Federal Reserve's indication of forthcoming interest rate cuts. The Coinbase Premium Index, which tracks the price discrepancy between Bitcoin on Coinbase Pro and Finance, reached its highest level since July 15, signaling heightened U.S. demand.
The Coinbase Premium Index peaked at 0.0114, reflecting increased buying pressure among U.S. traders. This index is utilized as an indicator of demand from the U.S. relative to global interest. Positive values suggest increased purchasing activity, whereas negative values can indicate a sell-off. Prior to the significant decline in {Bitcoin} (BTC) price on August 5, known as "Crypto Black Monday," the index had dropped below -0.10, highlighting a period of substantial selling.
The surge in Bitcoin demand coincided with remarks from Federal Reserve Chair Jerome Powell, who confirmed intentions to reduce interest rates in the future, though he did not specify an exact timeline. During his speech at the Jackson Hole symposium, Powell emphasized the need for policy adjustments but left the specifics of the rate cuts unclear.
Following Powell’s announcement, Bitcoin's price rose to nearly $65,000, marking a high not seen since early August. The rise in Bitcoin’s value came amidst a backdrop of anticipation regarding potential policy easing by the Federal Reserve, which had been closely monitored by the markets.
In the hours leading up to the Fed's announcement, Bitcoin was trading around $60,000. At that time, concerns remained about potential selling pressure from miners, given the cost of mining Bitcoin was reported to be around $72,224. This factor also influenced market sentiment and the fluctuations in Bitcoin’s price.
The data underscores how macroeconomic signals and central bank policies can significantly impact cryptocurrency market dynamics and investor behavior.
