Bitcoin plummeted on Sunday after US President Joe Biden announced he was withdrawing from the election race. The decline in BTC has resulted in $159 million in liquidations.

But this pain doesn't last long. Bitcoin price has now surged past its pre-drop levels and crossed the $68,000 mark this morning. 

Bitcoin price chart. Source: TradingView

At the time of writing, Bitcoin has dropped to $67,084 – but is still trading 0.5% higher than this time yesterday. Furthermore, BTC is up 7.1% on the week and saw $30 billion in trading volume in the past 24 hours.

While Biden's withdrawal from the 2024 presidential election is certainly a major catalyst for some investors, there are still other macroeconomic factors at play.

The People's Bank of China (PBOC) surprised markets by suddenly cutting short-term policy rates and benchmark lending rates on Monday – a big move from the world's second-largest economy.

The announcement comes as investors look ahead to the next meeting of the US Federal Reserve's Federal Open Market Committee – scheduled for July 31.

According to CME, currently about 95% of investors are certain that the FOMC will leave interest rates unchanged for the next nine days while 92% expect that the FOMC will cut interest rates after the September 18 meeting.

Source: CME

Bitcoin tends to increase in price if the Fed cuts interest rates because it makes investments like Treasury bonds less attractive. That tends to cause traders to allocate the majority of their assets to riskier categories, like stocks and cryptocurrencies.

Now, traders are looking forward to new economic data from the Bureau of Economic Analysis released this week to strengthen their positions ahead of September.

Another factor to watch out for: The start of spot trading of the Ethereum ETF in the United States, scheduled for Tuesday, July 23. Although it will be a big launch for Ethereum funds Spot ETF, which could help fuel Bitcoin's positive moment and send it to a month high.

“If this trend continues, Bitcoin could surpass $70,000 tomorrow with the launch of the Ethereum ETF. While the likelihood of Bitcoin accelerating parabolically does not appear high at this time, positive ETF inflows could sustain the bullish momentum longer than expected,” BRN analyst Valentin Fournier wrote.

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