BTC Price Analysis: ETF Inflows and Fed Rate Cut Hopes Push Bitcoin to $60K

Bitcoin Surges Back to $60K: Fed Policies and ETF Inflows Fuel Rally

On Tuesday, September 17, BTC rallied 3.71%, reversing a 1.69% loss from the previous session, closing at $60,321. BTC outperformed the broader crypto market, which advanced by 2.67% to a market cap of $2.040 trillion. Sentiment toward the US economy, the Fed rate path, and US BTC-spot ETF market flow trends drove BTC demand.

US Retail Sales and Fed Rate Cut Bets

On Tuesday, US retail sales figures supported investor expectations of a soft US economic landing.

Retail sales increased by 0.1% in August, following a 1.1% surge in July. Notably, economists had expected a decline in retail sales. Accounting for over 60% of the US GDP, the data pointed to a resilient US economy.

BTC reacted to the numbers, initially dipping below $59,000 before surging to a session high of $61,325.

Despite the better-than-expected headline retail sales data, the CME FedWatch Tool reflected an increased probability of a 50-basis point Fed rate cut. The chances of a 50-basis point Fed rate cut rose from 62.0% on September 16 to 64.0% on Tuesday, September 17.

US BTC-Spot ETF Market Extends Inflow Streak

Meanwhile, Tuesday’s US BTC-spot ETF market flow trends contributed to BTC’s gains as investors considered the US economic outlook and Fed rate path. According to Farside Investors:

• On Tuesday, September 17, Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $56.6 million (previous day: +$5.1 million).
• Bitwise Bitcoin ETF (BITB) reported net inflows of $45.4 million (previous day: zero).
• ARK 21Shares Bitcoin ETF (ARKB) had net inflows of $42.2 million (previous day: zero).
• VanEck Bitcoin Trust (HODL) saw net inflows of $20.5 million (previous day: $4.9 million).

Excluding iShares Bitcoin Trust (IBIT) flows, US BTC-spot ETFs saw $186.8 million in net inflows on September 17, up from $12.8 million on Monday, September 16.

The increased BTC demand coincided with MicroStrategy (MSTR) announcing a proposed private offering of $700 million of convertible senior notes to redeem $500 million senior secured notes. MicroStrategy could use the remaining funds to acquire BTC.

Increased BTC demand may ease oversupply fears stemming from the US Government’s 203,239 BTC stockpile.

US Economic Calendar: The Fed Under the Spotlight

On Wednesday, September 18, the FOMC interest rate decision, projections, and press conference will influence BTC demand.

The consensus is for a 25-basis point Fed rate cut, which may drive buyer demand for BTC. However, Fed optimism toward a soft landing and a 50-basis point Fed rate cut could push BTC toward $70,000. Conversely, fears of a hard US economic landing and a 50-basis point Fed rate cut may drag BTC toward $55,000.

Investors should remain alert, with the Fed’s forward guidance and views on the US economy crucial for BTC and the broader market. Stay updated with our latest news and analysis to manage your BTC and crypto exposures.

Technical Analysis

Bitcoin Analysis

BTC remains above the 50-day and 200-day EMAs, sending bullish price signals.

A break above the $60,365 resistance level could give the bulls a run at the $64,000 resistance level. Furthermore, a breakout from the $64,000 resistance level may signal a move toward the $67,500 handle.

Investors should consider BTC-spot ETF market trends and the Fed interest rate decision.

Conversely, a drop below the 50-day and 200-day EMAs could signal a fall toward $57,500. A fall through $57,500 may bring the $52,884 support level into play.

With a 54.62 14-day RSI reading, BTC could break above the $64,000 resistance level before entering overbought territory.

Ethereum Analysis

ETH hovered well below the 50-day and 200-day EMAs, confirming a bearish price trend.

An ETH breakout from the $2,403 resistance level could signal a move toward the $2,500 level. Furthermore, a break above $2,500 may give the bulls a run at the $2,664 resistance level.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH drop below the September 6 low of $2,150 and the $2,124 support level could signal an ETH fall through $2,000.

The 14-period Daily RSI reading, 41.77, indicates an ETH drop below the $2,124 support level before entering oversold territory.