Bitcoin (BTC) price is up today, rising over 2.5% with a sharp upward candle that sent the price to a September high of over $27,400.
The Bitcoin price increase today comes after a flat weekend where BTC held the key $26,000 level, giving confidence to traders and analysts who see this level as crucial.
Bitcoin price. Source: TradingView
Let’s look into the reasons why Bitcoin price is up today.
Annual Core CPI falls ahead of FOMC
According to the Sep. 13 Consumer Price Index (CPI) report, inflation rose 3.7% in August, higher than the 3.5% in July. More importantly, the annual core CPI model which measures all items minus food and energy showed more positive data. August annual core CPI came in at 4.3%, less than the previous month’s jump of 4.5%.
The potential that inflation may reach the United States Federal Reserve’s 2% targets is providing hope that interest rate increases will pause at the Federal Open Market Committee (FOMC) meeting on Sep. 20, an outcome that investors believe benefits risk-assets like Bitcoin.
Related: How to protect your crypto in a volatile market: Bitcoin OGs and experts weigh in
According to CME Group, a derivatives marketplace with a global benchmark product that estimates interest rates, shows a high probability that the Fed will pause interest rate increases.
Interest rate probabilities. Source: CME Group
The graph points to a possible freeze in interest rate hikes. The public sentiment shows confidence in the pause and investors believe that this has created the possibility for a broad crypto market recovery.
Institutional interest in Bitcoin boosts market sentiment
Multiple large institutions filed for Bitcoin ETFs after the U.S. Court of Appeals Circuit Judge Neomi Rao sided with Grayscale Bitcoin Trust (GBTC) on Aug. 29 in its case against the U.S. Securities and Exchange Commission (SEC).
This accompanies growing institutional interest in Bitcoin from companies like BlackRock and Fidelity Investments. While both institutions had BTC spot ETF approvals delayed on Sep. 2, the $1.5 trillion asset manager Franklin Templeton filed for a spot Bitcoin ETF on Sep. 12.
To date, the SEC has refused to approve a spot Bitcoin ETF, despite numerous applicants including BlackRock, Fidelity, Cathie Wood’s ARK and 21Shares, which has filed three times.
The SEC’s next decision deadline is Oct. 16 but another postponement is highly probable.
Bitcoin supply on exchanges keeps dropping
Coinciding with Bitcoin’s price gains, the BTC supply on exchanges continues to remain below the Sep. 4 monthly peak. Crypto exchanges have shed over 40,000 Bitcoin since then.
BTC balance on exchanges. Source: Coinglass
Bitcoin leaving crypto exchanges is generally perceived as a bullish signal since the available supply for spot selling decreases.
With Bitcoin continuing to leave exchanges, liquidations also tend to have a strong impact on price. In the past 24 hours alone, over $28.4 million BTC shorts have been liquidated with over $27.9 million in shorts liquidated in a 12-hour timeframe.
Bitcoin liquidation data. Source: Coinglass
Despite the short-seller losing streak, 50% of the futures market remains short on Bitcoin price. Thus, a potential opportunity for a short-squeeze, and even higher BTC prices, is on the table.
Bitcoin short vs. long ratio. Source: Coinglass
Meanwhile, as Bitcoin price is showing some bullish momentum in the short-term ahead of the FOMC, the Bitcoin Fear & Greed Index is still flashing “fear” despite climbing slightly compared to the previous month.
Bitcoin Fear & Greed Index. Source: Alternative.me
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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