On Thursday, August 29, Bitcoin maintained its price above $60,000 despite experiencing two consecutive days of outflows from its exchange-traded funds (ETFs). According to data from SoSoValue, Bitcoin ETFs saw a reduction of $105.19 million in assets on Wednesday, following a $127 million drop the previous day. These funds, primarily backed by institutional investors, have accumulated a total of $17.85 billion.
Potential Catalysts for Bitcoin Price Increase
Bitcoin’s price is poised for potential increases due to several factors. Notably, the amount of Bitcoin held on exchanges has dropped to its lowest point this year. CoinGlass reports that exchanges held 2.38 million Bitcoins as of August 29, down from 2.4 million on August 27 and significantly lower than last month’s peak of 2.50 million. Decreasing Bitcoin reserves on exchanges typically suggest reduced liquidity in the market, as fewer investors are moving their coins to exchanges for liquidation.
Additionally, the falling US dollar and rising US public debt present potential catalysts for Bitcoin. The US dollar index, which measures the greenback against other major currencies, has decreased to $101.50, reflecting a drop of over 4.7% from its highest level this year. This decline follows Federal Reserve Chair Jerome Powell’s indication of possible interest rate cuts in September.
US public debt continues to rise, reaching over $35.2 trillion or 123.2% of the GDP. The annual interest on this debt has surpassed $920 billion, highlighting the growing financial strain. This trend mirrors global liquidity levels, which have hit a record $95 trillion, potentially driving more institutions and retail investors towards alternatives like Bitcoin.
The options market also suggests a possible Bitcoin rebound, with predictions pointing to a potential rise to $90,000 later this year. Moreover, the Bitcoin funding rate has fallen to -0.0011%, indicating possible upward momentum for the cryptocurrency.
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