Rising Market Tensions

On Wednesday, data showed that Bitcoin briefly dipped to $112,565, marking its lowest point since August 3.

Ryan Lee, chief analyst at Bitget, said the decline reflects “rising nerves in the market.” According to Lee, the macroeconomic uncertainty surrounding Powell’s speech has triggered “fear spikes” among crypto traders. However, he noted that if the $112,000 support holds, it may not signal a reset but rather set the stage for the next leg of the bull run.

Inflation and Rate Cut Expectations

On August 12, the U.S. Consumer Price Index (CPI) showed a 2.7% year-over-year increase. While unchanged from June, the figure remains above the Fed’s 2% target.

Following this, expectations for a September rate cut decreased. According to CME Group’s FedWatch tool, the probability dropped to 82%, down from 94% a week earlier.

André Dragosch, Head of European Research at Bitwise, emphasized that potential Fed cuts in 2025 could be a major catalyst for the markets. He argued that lower rates would boost U.S. money supply and strongly support Bitcoin’s rally at least until the end of the year.

Corporations Keep Accumulating Bitcoin

Despite weaker sentiment among retail traders, institutional players continue to accumulate Bitcoin.

The number of entities holding Bitcoin has surged from 124 in early June to 297. This includes 169 public companies, 57 private firms, 44 investment funds, and 12 governments. Together, they now hold 3.67 million BTC — representing more than 17% of the total supply.

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The post Bitcoin Drops to $112K Ahead of Powell’s Speech! appeared first on Coin Engineer.

US Debt and Money Supply Growth

US Representative Thomas Massie noted that the federal debt surpassed $37 trillion thanks to the One Big Beautiful Bill Act. US President Donald Trump signed the legislation on July 4, stating it could cut up to $1.6 trillion in federal spending.

Analysts suggest that growing budget deficits may prompt central banks to adopt looser policies like quantitative easing (large-scale bond purchases). This could inject liquidity into the financial system, creating a favorable environment for Bitcoin.

Bitcoin’s Growth Potential

Ryan Lee, chief analyst at Bitget crypto exchange, highlights that US debt rose from $26.7 trillion in 2020 to $37 trillion over five years—a 38% increase—while Bitcoin gained 925% during the same period. According to Lee, as debt grows, the likelihood of BTC reaching new all-time highs also increases.

Moreover, the US government might consider Bitcoin as a tool to manage its debt, potentially boosting BTC’s value in correlation with global money supply and inflation.

M2 Money Supply and Inflation Effects on Bitcoin Price

Debt servicing could drive a rise in the global M2 money supply, acting as a new catalyst for Bitcoin price. Jamie Coutts, chief crypto analyst at Real Vision, estimates that this could push BTC above $132,000 by the end of 2025.

Arthur Hayes, co-founder of BitMEX, adds that if the US Federal Reserve returns to QE and inflation pressures rise, BTC could climb as high as $250,000.

These developments indicate that rising inflation and expanding money supply could serve as significant bullish catalysts for Bitcoin.

This content is not financial advice. Markets carry high risk, and it’s essential to conduct your own research before making investment decisions.

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The Bitcoin reserves on Binance, the world’s largest crypto exchange by trading volume, have fallen to levels not seen since January 2024. This decline comes just two months before Bitcoin’s price surged by 90% in March. If Bitcoin follows the same pattern, its current price of $98,680 could reach $187,500 in a few months.

Signals Indicate That Investors Are Confident

The drop in Binance’s Bitcoin reserves below 570,000 BTC, reaching the lowest level since January, typically indicates that investors are moving Bitcoin into cold storage and are optimistic about its long-term price prospects.

At The Time of Publication, Bitcoin’s Price Was $98,680

Binance’s reserves dropped to a similar level in January, and two months later, on March 13, BTC surged to $73,679, marking its highest level at that time.

Darkfrost: “When withdrawal periods occur, it usually signals that positive momentum is building in the markets.”

Bitcoin Dominance Is Hovering Just Below 60%

According to TradingView data, BTC dominance currently stands at 58.4%, just below the critical 60% level.

However, some analysts suggest that the 60% level could signal a broader rotation towards other crypto assets.

On August 18, Into The Cryptoverse founder Benjamin Cowen stated that he believed Bitcoin would make its “final move” toward 60% by December, and this prediction came true two months later on October 30.

At The Time of Publication, Bitcoin Dominance Is At 58.4%

Meanwhile, Bitcoin has struggled to hold above the psychological level of $100,000 since first breaking it on December 5.

Bitcoin’s price has been trading under the $100,000 mark since December 19, after reaching a new high of $108,300 on December 17. According to Ryan Lee, chief analyst at Bitget Research, Bitcoin’s price could exceed $105,000 once liquidity returns after the Christmas holidays.

Lee stated that Bitcoin’s current downtrend is a typical sign of holiday illiquidity.

“Post-Christmas, market activity typically picks up again, with funds expected to actively position for sectors that might benefit from Trump’s upcoming inauguration… The expected trading range for BTC this week is $94,000 – $105,000.”

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On November 5, Bitcoin broke its all-time high of $73,800, reaching $90,000 for the first time on November 12. The price continued to soar, reaching $93,215 on November 13. However, this price surge led to increased selling pressure from long-term investors, but Percival pointed out that Bitcoin ETFs are absorbing much of the selling activity, preventing a significant impact on Bitcoin’s price.

Despite this increase in sell pressure, analysts remain optimistic about Bitcoin’s potential to reach $100,000 by the end of the year. MicroStrategy CEO Michael Saylor believes Bitcoin will surpass $100,000 in November or December. Additionally, Ryan Lee, Chief Analyst at Bitget, mentioned that November is historically one of the best months for Bitcoin’s returns, suggesting that the cryptocurrency could easily surpass $100,000 before the year ends.

In conclusion, while $90,000 is an important psychological level for Bitcoin, the overall market sentiment is focused on higher targets, with investors looking forward to a potential rally towards $100,000.

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