We expected the FOMC minutes to lean dovish, with Fed Chair Powell emphasizing labor market weaknesses. This dovish softer stance fueled Bitcoin's surge, which resulted in solid returns. Liquidity inflows have reached a new high for the year at $61.9 billion, driven by increased stablecoin minting and rising leverage through Bitcoin perpetual futures, further fueling positive price momentum.

As critical macroeconomic data looms, Bitcoin's upward trend may persist, bolstered by consistent, modest inflows into Bitcoin Spot ETFs. The macro environment has seen notable shifts since early July, with the U.S. dollar peaking, Treasury yields declining and oil prices falling. This has coincided with a three-month decline in the ISM® manufacturing index, indicating potential economic weakness.

Consequently, risk assets have faced sharp sell-offs, exacerbated by rising unemployment. Since Bitcoin is correlated with risk assets such as stocks, the correlation that a stronger ISM manufacturing index could be bullish for stocks should also be valid for Bitcoin (and vice versa). With weak economic indicators and a declining dollar, Powell's recent speech has set expectations for increased market liquidity, potentially benefiting risk assets like Bitcoin.

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