Bitcoin approaches the key daily support level of $56,000, eyeing for a recovery.
Microstrategy announces $700M private offering for debt buyback and Bitcoin acquisition.
CME Group data projects a higher 69% chance of a 50 bps rate cut by the US Federal Reserve on Wednesday.
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Bitcoin (BTC) shows signs of recovery and rises above $59,000 at the time of writing on Tuesday, following a three-day decline after failing to close above $60,500 over the weekend. This positive momentum could be bolstered by an anticipated 50 basis points (bps) US interest rate cut by the US Federal Reserve (Fed) on Wednesday, according to CME Group data. At the same time, the announcement of Microstratergyâs plan to purchase more BTC indicated further potential for Bicoinâs recovery in the coming days.
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Daily digest market movers: 69% chance of 50 bps rate cut
The upcoming Fed decision on Wednesday will likely cause a volatile price action for Bitcoin and global currencies. According to CME Group data, there is a 69% chance that the Fed will cut interest rates by 50 bps on Wednesday for the first time in over four years. This big rate cut could be a bullish sign for cryptocurrencies, stocks, and global markets as lower borrowing costs generally provide more purchasing power for investors, and they would invest their money into assets rather than keeping it in banks.Â
âThe Federal Reserve is widely anticipated to cut the interest rate at its September on Wednesday, the first time in four years. Investors will also take more cues from interest rate projections, known as the âdot plotâ. The expectation of aggressive rate cuts might continue to undermine the Greenback in the near termâ, said Lallalit Srijandorn, an analyst at FXStreet.
Rate cut probability chart
On Monday, US-based Microstrategy (MSTR), the publicly traded business intelligence company, unveiled plans for a private offering of $700 million in convertible senior notes. The firm plans to raise capital to pay off debt and purchase more Bitcoin.
âMicroStrategy has acquired 18,300 BTC for ~$1.11 billion at ~$60,408 per #bitcoin and has achieved BTC Yield of 4.4% QTD and 17.0% YTD. As of 9/12/2024, we hodl 244,800 $BTC acquired for ~$9.45 billion at ~$38,585 per bitcoin,â said Microstrategyâs CEO Michael Saylor in his Twitter post.
Now valued at $14.15 billion, the companyâs Bitcoin portfolio has seen a 50% gain, driven by combining strategic fixed-interval purchasing and Bitcoinâs price growth.
Microstrategyâs focus on balancing debt reduction with Bitcoin accumulation continues to be central to its broader financial goals. Unlike exchange-traded funds (ETFs) like Blackrockâs IBIT and Grayscaleâs GBTC, Microstrategy holds the most Bitcoin of any publicly traded company worldwide.
MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
â Michael SaylorâĄïž (@saylor) September 16, 2024
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US Bitcoin Spot Exchange Traded Funds (ETF) data recorded a mild inflow of $12.80 million on Monday, following a $403.30 million net inflows last week. Still, this inflow is small compared to the total Bitcoin reserves held by the 11 US spot Bitcoin ETFs, which total $49.44 billion in Assets Under Management (AUM).
Bitcoin Spot ETF Net Inflow chart
Bitcoin ETF AUM chart
However, Coinglassâs data provides a mild bearish outlook for Bitcoin. Bitcoinâs long-to-short ratio is at 0.99, indicating that more traders anticipate the asset price to fall. In any case, the ratio is very close to one, and a flip above one would indicate that tradersâ sentiment would shift from bearish to bullish.
Bitcoin long-to-short ratio chart
Technical analysis: BTC eyes for a recovery
Bitcoin price retested and failed to close above the descending trendline (drawn from multiple high levels from the end of July) and the 100-day Exponential Moving Average (EMA) at $60,705 on Friday. It declined 3.78% in the next three days. At the time of writing on Tuesday, it trades just above $59,000.
If BTC continues to retrace, it could find support around the daily level of $56,022. If this support holds, BTCâs price could again attempt to break above the 100-day Exponential Moving Average (EMA) at $60,685 and the descending trendline.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart hover around their neutral levels of 50 and zero, indicating that neither the bulls nor the bears control the momentum. For the aforementioned bullish move to be sustained, both indicators must trade above their neutral levels.
BTC/USDT daily chart
However, If BTC closes below the $56,022 daily support level, the bullish thesis will be invalidated. In this case, it could decline 3.6% to retest its psychologically important level at $54,000.
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
