TL;DR
- Bitcoin rebounds above $56,900 after liquidating $32.7 million in short positions, boosting market volatility.
- Analysts warn that BTC’s future price depends on political and economic events in the U.S., such as the Trump-Harris debate and CPI data.
- Although Bitcoin shows reduced sensitivity to S&P 500 drops, the market remains volatile ahead of the Fed’s decision on September 18.
Bitcoin has bounced back strongly after falling to a recent low of $52,500, recovering and nearing the $57,000 level. The recovery has triggered a wave of liquidations in the market, mainly of short positions, as $42.9 million in BTC positions were liquidated in the last 24 hours, with $32.7 million coming from short trades.
Overall, the crypto market has recorded more than $115 million in liquidations during the same period, with a clear majority of these being short positions, according to Coinglass data.
Analysts point out that Bitcoin’s price movement is closely linked to various factors, including upcoming political events in the United States, economic data, and the Federal Reserve’s interest rate decisions. Valentin Fournier, an analyst at BRN, noted that if BTC’s price manages to surpass the local high of $59,750 recorded last Tuesday, it could be a sign of a sustained bullish trend.
However, he warns that this will depend on how certain events unfold, such as Donald Trump’s performance in the debate with Kamala Harris and the upcoming release of the Consumer Price Index (CPI), which could provide clues about the magnitude of a potential rate cut by the Federal Reserve at next week’s Federal Open Market Committee (FOMC) meeting.
Bitcoin Recovers, But Could Fall Again
Fournier also highlighted the possibility that news about inflation and potential rate cuts could trigger a “buy the rumor, sell the news” pattern, which could cause market volatility in the coming weeks. Although breaking the $59,750 resistance level could signal a stronger bullish trend, the analyst emphasized that market volatility remains high and that the risk of further price declines persists as the Fed’s decision approaches on September 18.
BTC’s behavior also reflects a close correlation with the U.S. stock market, particularly with the S&P 500 index, which posted its biggest weekly drop since March 2023. Despite this correlation, Bitcoin has shown less sensitivity to negative stock movements compared to previous periods, which could indicate seller exhaustion in the crypto market. Analysts suggest that traditional finance investors tend to reduce exposure to assets like cryptocurrencies before reducing exposure to stocks during market downturns.
In the last 24 hours, Bitcoin has gained 3%, with its current value around $56,900. Trading volume has increased by 24%, nearing $34 billion, and market capitalization has also risen by 2.9%, surpassing $1.12 trillion
