Bitcoin price briefly re-crossed the $61,000 mark after volatile trading over the past few days. This sharp rise has sparked optimism among crypto market enthusiasts and fueled discussions about the possible reason behind the recent surge. Moreover, the market is also closely watching whether the flagship cryptocurrency could hit the $64,000 resistance next, which could pave the way for another rally.
Here is a brief report on the possible reasons behind the uptrend of the world’s largest cryptocurrency today, August 22nd.
Why is the Bitcoin price so high today?
A number of factors could be responsible for the recent surge in Bitcoin price. Here we explore some of the key reasons that helped the cryptocurrency surpass the $61,000 mark today.
US Federal Reserve minutes raise optimism about upcoming interest rate cuts
The Federal Reserve’s dovish minutes from its July meeting suggested a looming rate cut as early as September, and recent FOMC minutes suggested that officials are showing a tendency toward looser monetary policy.
Data from the CME Fed Watch Tool today showed that 71.5% continue to expect a 25 basis point rate cut, while 28.5% believe a 50 basis point rate cut is imminent.
In addition, the FOMC minutes reflected officials’ growing concerns about the economic situation across the country. They also suggested that the Federal Reserve is willing to take a more dovish approach if market dynamics favor the decision.
Market dynamics
The BTC Fear and Greed Index has generated additional enthusiasm among investors today, recovering from a low of 29 last week to 39 today. As mentioned above, the Bitcoin market seems to be reacting positively to the FOMC minutes.
Furthermore, data from the derivatives market shows that there is a strong bullish trend for BTC in parallel with today’s price increase. Coinglass data showed a 5.59% increase in the coin’s futures OI to $32.28 billion.
Furthermore, derivatives volume increased by 22.87% to $68.61 billion, according to the data. This data underscores investor optimism about the asset, driven by increased market interest.
Inflow of Bitcoin ETFs fuels optimism
The US Spot Bitcoin ETF has seen continuous inflows worth $236.6 million over the past five trading days. The latest update from Farside UK shows inflows into ETFs worth $39.5 million as of August 21, with Grayscale leading the way.
The increase in institutional demand for this cryptocurrency’s exchange-traded product in recent days is in line with today’s rally in Bitcoin price.
Bitcoin price rises sharply today
At press time, BTC price was up nearly 1% at $60,461. Over the past 24 hours, the flagship cryptocurrency has touched a high of $61,834.35 and a low of $59,737.90, reflecting the volatile scenario dominating the market. Furthermore, this pumping movement reflects a 24-hour increase of 33% in trading volume to $34.55 billion.
Bitcoin dominance stood at 55.86% today, down slightly by 0.05% from the previous day. However, a recent report from CoinGape found that BTC dominance was approaching a 40-month high, sparking further optimism.
It is also worth mentioning that the ongoing US presidential election campaigns have put cryptocurrencies in the spotlight. Moreover, a recent CryptoQuant report shows that short-term investors are forming a crucial resistance at the $64,000-$66,000 level, making the BTC price even more exciting today.
Coingape Staff
CoinGape is comprised of an experienced team of homegrown content writers and editors who work around the clock to cover news around the world and present it as facts, not opinions. CoinGape writers and reporters contributed to this article.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Conduct market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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