Bitcoin has recovered from a recent low of $52,500, surpassing the $57,000 mark, sparking a notable wave of short liquidation.
In the past twenty-four hours, nearly $45 million of bitcoin positions have been liquidated, with short positions accounting for $36 million of this figure. The broader cryptocurrency market faced more than $126 million in liquidation, driven primarily by short positions.
Analysts are closely watching many upcoming US political and economic events that may affect the trajectory of Bitcoin’s price. Key factors include Donald Trump’s expected performance in a debate against Kamala Harris and the Consumer Price Index (CPI) report scheduled for Wednesday.
These events may provide insights into potential rate cuts by the Fed at next week’s Federal Open Market Committee (FOMC) meeting.
Valentin Fournier pointed out that if Bitcoin surpasses the local high of $59,750 reached last Tuesday, it could signal the beginning of an uptrend. However, he warned that market volatility remains high, and further declines are possible, especially as the Fed’s interest rate decision approaches on September 18.
Recent trends suggest that bitcoin price movements are increasingly related to the US stock market. The S&P 500 saw its steepest weekly decline since March 2023, closing down 4.25%.
This decline coincided with a 5.45% drop in Bitcoin prices last week. Analysts from Bitfinex note that Bitcoin’s reduced sensitivity to stock movements may indicate seller fatigue in the cryptocurrency market. Moreover, spot forecasts suggest that any price hikes may be temporary as traders adopt a risk-averse attitude ahead of these events.
Bitcoin, Ethereum Recover Amid Rate Cut Concerns
Over the past week, both Bitcoin and Ether have shown resilience, rebounding from significant lows. While Bitcoin prices were hovering around $57,000 at the time of publication, the dynamics of Ether prices were slightly different but no less interesting. The recovery appears to be driven by positive sentiment emanating from key economic indicators, especially those surrounding the possibility of a rate cut by the Fed..
Market sentiment analysis through options trading
Market sentiment is a crucial element in understanding price dynamics, and current options trading provides insight into traders’ concerns. Indicators released by Deribit reveal a marked bias towards put options, suggesting that traders are wary of potential declines. Despite the recent price hike, the caution in trading behavior – especially the bias towards put options for both Bitcoin and Ether – indicates a pervasive concern about sustainability. The desire to protect against downside seems particularly obvious As recent US nonfarm payrolls data exacerbated recession fears
It is worth noting that the comment from Tony Stewart of Deribit Insight highlights that trading activities indicate bearish sentiment. The position of traders indicates expectations that Bitcoin may fall to the level of $50.000 or even $40.000. This sentiment can be largely attributed to historical patterns, where every start of the Fed’s rate cut cycle has usually increased risk aversion in financial markets.
Analysts confirm that the release of the upcoming US inflation data and the subsequent interest rate decision by the Federal Reserve on September 18 will be decisive events. FxPro’s Alex Kuptskevich expressed the prevailing caution in the market, asserting that trading sentiment is likely to remain subdued until these pivotal announcements unfold.
Bitcoin ETFs Record Mixed Flows
Bitcoin exchange-traded funds in the United States recorded total net inflows of $28.72 million on September 9. Exchange-traded of Bitcoin funds have recorded inflows after a long period of outflows since August 27.
Bitcoin exchange-traded funds in the US have seen the largest outflows since their launch in January. Bitcoin exchange-traded funds in the top 11 recorded cumulative net outflows of $1.2 billion from August 27 to September 6.
Experienced of Bitcoin significant price fluctuations at the beginning of the month. The coin traded at around $64,000 on August 26, but its price dropped to around $53,491 on September 7, meaning the price fell by more than 16% in less than two weeks.
The price of Bitcoin has since risen to $57,077 at the time of writing, up 3.10% from yesterday. Bitcoin’s trading volume has increased in the past twenty-four hours to $33.822 billion, up 45.83% from yesterday.
BlackRock Bitcoin ETF’s IBIT Fund recorded outflows
Data from Farside Investors showed that BlackRock Bitcoin ETF’s IBIT fund still has outflows despite other ETFs recording inflows. The data indicated that the IBIT fund had total net outflows of $9.1 million as of September 9.
The outflow was the third recorded by the exchange-traded fund this year, with the first occurring in May and the second on August 29. The first outflow on May 1 saw $37 million withdraw from the fund, while the second outflow on August 29 saw $13.5 million withdrawn.
Grayscale’s Bitcoin Spot ETF, GBTC, recorded significant outflows of $22.9 million on September 9. Updated data from the fund shows that assets under management fell to 222,700 BTC compared to the previous figure of 620K BTC.
Crypto fraud losses rise to $5.6 billion
The Federal Bureau of Investigation (FBI) has revealed that reported cryptocurrency fraud losses in the United States have risen to an unprecedented $5.6 billion in 2023. This alarming 45% increase over 2022 positions cryptocurrencies as a prominent target for fraudsters who exploit digital currencies. Within the total complaints received, cryptocurrency-related complaints accounted for nearly 10%, while these complaints accounted for nearly 50% of the total financial losses reported during the year.
The FBI report highlights a worrying trend: the majority of the 69,000 complaints about cryptocurrencies during 2023 were filed by individuals aged 60 or older. The losses of this population group amounted to about $1.6 billion, indicating the urgent need for awareness raising and preventive measures tailored to older investors. The report emphasizes the urgent need for educational awareness for this vulnerable group to mitigate the risk of becoming a victim of fraud.
Delving into the nature of cryptocurrency fraud, the report reveals that 71% of reported scams involve fraudulent investment schemes. These scams promise unrealistic returns on investments, and tempt victims to lure the rapid accumulation of wealth. About 10% of reported cases involve phone scams and government impersonation scams, further illustrating the various methods used by fraudsters. Relying on such deceptive tactics highlights the importance of vigilant scrutiny of cryptocurrency investments.
The FBI assures that the best defense against becoming a victim of cryptocurrency fraud is vigilance. One critical warning sign identified in the report is the tendency of scammers to avoid face-to-face interactions. Investors should be very careful when dealing with investment opportunities from unfamiliar individuals.
