Expectations of a rally are mounting as crypto awaits a big Federal Reserve announcement on September 17.
Markets see an interest rate cut on Wednesday as all but certain, a move that will inject fresh liquidity into the global financial system. Lower borrowing costs historically launch risk assets such as crypto higher.
“We’re only halfway through what could be a very powerful Q4 rally,” Sean Dawson, head of research at Derive, said in a note to investors.
That anticipation comes on the back of Bitcoin having fallen almost 8% since its $124,128 high in August.
Yet, Dawson dismissed fears that this cycle has peaked.
“The coming weeks could bring increased volatility and some short-term pain,” he said, pointing to September’s historic fiscal year-end selling pressure.
But “falling rates, institutional positioning, and bullish derivatives markets” mean “this is likely not the cycle top,” he said.
And traders are flashing bullish signals. For instance, investors poured $2.3 billion into US spot Bitcoin exchange-traded funds over the past five days, according to SoSoValue.
This underscores the “continued strong demand for Bitcoin,” Illia Otychenko, lead analyst at crypto-trading platform CEX.IO, told DL News.
Options position data supports the bullish sentiment. Open interest is stacked around $140,000 to $200,000 strikes for December expiry, with calls outnumbering puts, according to Deribit.
Dawson predicts Bitcoin at $140,000 by year-end, with $200,000 as a conservative cycle top and $250,000 possible if institutional flows persist.
Numerous industry voices have echoed bullish calls all year.
Arthur Hayes, founder of BitMEX, has predicted $250,000 Bitcoin this year. Analysts at Bitwise, Bernstein, and Standard Chartered have predicted $200,000.
Coinbase CEO Brian Armstrong has gone further, projecting $1 million Bitcoin by 2030. Eric Trump, son of US President Donald Trump and an executive at the family’s sprawling crypto empire, echoed that sentiment.
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Bitcoin is down 0.8% over the past 24 hours to trade at $115,100.
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Ethereum is down 3.2 % over the past 24 hours trading at $4,520.
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at lance@dlnews.com.