Bitcoin’s price shows resilience in anticipation of the FOMC meeting as investors place their bets on the possibility of the committee maintaining current interest rates.
Could this signal the conclusion of the Capitulation Phase for Bitcoin and the industry?
The Current Market Scene
Traders estimate a 98% likelihood that the Fed will maintain current interest rates, with just a 28% probability of a rate hike in November. This data is according to the CME Group’s FedWatch tool, which assesses pricing in the fed funds futures market.
Bitcoin’s market dominance rate, which measures the largest cryptocurrency’s share of the overall digital asset market, reached 50.2% earlier on Monday. It represents its strongest level in a month and is close to the 26-month high of 52% achieved at the end of June.
From a broader perspective, Bitcoin’s market dominance remained within a range of 39% to 49% for over two years before reaching the 52% level in June. This breakout followed asset manager BlackRock’s filing for a spot BTC exchange-traded fund, fueling hopes of significant inflows into the asset.
Number of pageviews on Bitcoin’s Wikipedia reached 7,830 on Sept 8th, the highest number of daily views in 2023. This could be attributed to the increased likelihood of a spot bitcoin ETF happening soon, leading people to search up Bitcoin and see what it's about. pic.twitter.com/4UFuUPGnUd
— The Block Pro (@TheBlockPro__) September 12, 2023
Additionally, Bitcoin could benefit from recent regulatory proposals from the New York Department of Financial Services (NYFDS) on Monday. These proposals entail stricter rules for listing cryptocurrencies on exchanges while designating BTC as a digital asset that license holders can list or custody without encountering additional regulatory hurdles.
The immediate impact on crypto markets could involve a further shift of interest towards BTC, as it solidifies its position as the “safe” cryptocurrency asset.
Insights From The Market Metrics
In tandem with Bitcoin’s price gains, the amount of BTC available on exchanges remains below the monthly peak observed on September 4th. Crypto exchanges have seen a net reduction of over 40,000 BTC since that date.
The outflow of Bitcoin from cryptocurrency exchanges is generally interpreted as a positive sign, as it reduces the available supply for immediate selling in the spot market.
Furthermore, the ongoing trend of Bitcoin leaving exchanges tends to amplify the impact of liquidations on the price. In the past 24 hours alone, liquidations affected 25,316 traders, totaling $87.36 million in liquidated assets.
Meanwhile, although Bitcoin’s price has been displaying some short-term bullish momentum in anticipation of the FOMC meeting, the Bitcoin Fear & Greed Index still indicates “fear,” albeit with a slight increase compared to the previous month. These data suggest that despite recent positive movements, there remains a degree of caution and uncertainty among market participants.
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