Crypto Insights: US Whales and Rising Liquidity Point to Potential Bitcoin (BTC) Price Rally
Crypto News – The beginning of September witnessed Bitcoin (BTC) experiencing a downturn, briefly falling below the $26,000 mark on a Friday. However, a crucial on-chain indicator has started showing signs of growing bullish sentiment among US-based whale investors.
The anticipation of the US Federal Reserve’s forthcoming Interest Rate announcement on September 19 has led to a flurry of activity among institutional firms in the United States. These entities appear to be engaged in last-minute Bitcoin (BTC) accumulation, sparking speculation about the potential for a Bitcoin price rally in the days ahead.
Wall Street Whales Exert Buying Pressure on Coinbase
As the next Federal Reserve meeting looms closer, a pivotal on-chain indicator has highlighted the accumulation of buy pressure by US institutional investors. CryptoQuant’s Coinbase Premium Index, which measures the percentage difference between Bitcoin prices on Coinbase Pro and Binance spot markets, is at the center of this observation.
Binance dominates the global retail spot market, whereas Coinbase Pro is primarily used by US-based institutional firms and high-net-worth traders. Consequently, positive values in the Premium Index signal an increase in buying pressure from US investors on Coinbase.
The chart from September 7 reveals that the Coinbase Premium Index entered positive territory for the first time this month. Interestingly, the last time this index surpassed 0.80 was around March 2023, and it was swiftly followed by a price rally that pushed Bitcoin’s price to $30,500, marking a peak for 2023.
The future trajectory of the Coinbase Premium Index remains uncertain. However, if it continues to rise, it could boost retail investors’ confidence and potentially trigger a price rally leading up to the next Federal Reserve meeting.
Rising Liquidity in BTC Markets Hints at a Reversal in Trend
This optimistic outlook is further bolstered by the influx of liquidity into Bitcoin spot markets during the past week. According to CryptoQuant, Bitcoin Spot Trading Volume has been steadily increasing since September 2, nearly doubling in volume.
To put it into perspective, on September 2, BTC Spot Trading Volume stood at 14,230 BTC. By the end of September 7, a total of 32,632 BTC had been traded across various crypto exchanges, representing a substantial 130% surge in Spot Market volumes within just one week.
Traditionally, Spot Trading volumes tend to decrease during bear markets, as disheartened investors exit their positions. Therefore, the rising BTC spot volumes amidst the current stagnant price action suggest a resurgence of liquidity and investor interest in the market. This increased liquidity may facilitate efficient order execution for Bitcoin traders in the coming days while potentially stabilizing prices.
Additionally, historical data trends indicate that recent Bitcoin price rallies have often been preceded by a surge in BTC Spot trading volumes.
In conclusion, the combination of buying pressure from US-based whales and the spike in BTC Spot trade volumes could pave the way for a Bitcoin price rally.
BTC Price Prediction: $28,000 Emerges as a Realistic Target
From an on-chain perspective, the actions of US-based whales could catalyze a Bitcoin price rally towards the $28,000 mark in the near future. This optimistic outlook aligns with the In/Out of Money Around Price data, which provides insights into the distribution of purchase prices among current Bitcoin holders.
This data indicates that if Bitcoin manages to surpass the $26,500 hurdle, it may gain the momentum needed to reach $28,000. As depicted below, the presence of 2.31 million addresses that purchased 740 BTC at the maximum price of $26,560 currently represents a significant resistance level. However, if the optimism of US whales intensifies, it could potentially propel the Bitcoin price rally to reach $28,000.
Conversely, bears could take control if the BTC price drops below $24,500. Nevertheless, as illustrated below, there are 654,000 addresses that acquired 253,000 BTC at the minimum price of $25,000. These addresses could offer substantial support by actively attempting to cover their positions. However, should this support level waver, it might lead to a gradual decline in BTC price toward $24,000.