Bitcoin experienced a brief decline on Sunday following U.S. President Joe Biden’s announcement that he will not seek a second term. This dip led to the liquidation of $159 million worth of futures contracts, as reported by Coinglass.
However, the downturn was short-lived. Bitcoin’s price rebounded, surpassing its pre-dip level and briefly reaching $68,000 early Monday morning, with a peak of $68,480.36.
At the time of writing, Bitcoin has retraced to $67,284.98, still trading 0.4% higher than the previous day, according to Coingecko data. Additionally, BTC has gained 7% compared to the previous week, with $30.2 billion in trading volume over the past 24 hours.
While Biden’s decision not to run in the 2024 presidential election significantly impacted some investors, other macroeconomic factors are also influencing the market.
On Monday, the People’s Bank of China (PBOC) surprised markets by unexpectedly cutting its short-term policy and benchmark lending rates, a significant move from the world’s second-largest economy.
This announcement comes as investors anticipate the U.S. Federal Reserve’s next Federal Open Market Committee meeting, scheduled for July 31.
Approximately 95% of investors now believe the Federal Open Market Committee (FOMC) will maintain current interest rates in nine days, according to the CME FedWatch Tool. However, nearly as many investors—92% as of Monday morning—expect the FOMC to cut rates following its September 18 meeting.
Bitcoin often views U.S. interest rate cuts as bullish because they make investments like treasury bonds less attractive. This usually leads traders to allocate more of their assets to riskier categories, such as stocks and cryptocurrencies.
Also Read: Will the Ethereum ETF Push Prices to a $5,000 High?
Traders are now anticipating the release of new economic indicators from the Bureau of Economic Analysis this week to strengthen their positions ahead of September.
“With significant macroeconomic indicators such as the U.S. GDP and PCE set to be released this week, we anticipate high market volatility in the coming days,” wrote BRN analyst Valentin Fournier in a note shared with Decrypt. “These figures are likely to confirm imminent rate cuts, potentially fueling the current rally.”
Another key event to watch is the start of trading for spot Ethereum ETFs in the U.S., scheduled for Tuesday, July 23, at 9:30 a.m. Eastern Time. Although this marks the debut of spot Ethereum funds, Fournier noted that it could enhance Bitcoin’s positive momentum and push it to a monthly high.
“If this trend persists, Bitcoin could cross $70,000 tomorrow with the launch of Ethereum ETFs,” he wrote. “While a parabolic acceleration for Bitcoin seems unlikely at this time, positive ETF inflows could sustain the rally longer than previously expected.”
