Bitcoin rebounded to $112,000 on Monday morning, recovering from losses experienced during last week’s downturn. This recovery was attributed to a surge in buying pressure over the weekend, resulting in a 2.5% increase in Bitcoin’s value within the last 24 hours, largely offsetting the losses from the prior Thursday, according to CoinGecko data. The rise in Bitcoin’s price has also positively influenced altcoins, leading to a $354 million liquidation event and pushing the total cryptocurrency market capitalization close to $4 trillion.
Farzam Ehsani, CEO and co-founder of VALR, noted that this morning’s rally was due to an interplay of macroeconomic relief, characterized by a weaker U.S. dollar and more stable rate expectations, combined with reduced leverage following recent liquidations and renewed interest from larger investors. Experts indicated that last week’s broader losses in the crypto market were primarily driven by quarter-end rebalancing activities. Data from Velo highlights that open interest for Bitcoin futures on the CME fell by $2.83 billion to $14.73 billion between September 18 and 25, and options saw a decline of $1.50 billion to $4.63 billion over the next two days.
Additionally, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced net outflows last week as part of this quarter-end adjustment. However, Singapore-based trading desk QCP Capital remarked that these outflows should not be viewed as a weakness but rather as a sign of underlying buyer strength.
Amidst this backdrop, a sense of optimism appears to be returning. While sophisticated traders adjusting their positions on CME products, perpetual traders in the cryptocurrency realm have shown resilience despite the previous week’s liquidation turmoil. QCP Capital reported an increase in open interest for Bitcoin’s perpetual contracts, rising from $42.8 billion to $43.6 billion, alongside positive funding rates.
In the prediction market Myriad, launched by DASTAN, users foresee Bitcoin closing out September above $105,000, though opinions remain divided regarding its long-term trajectory. Predictions indicate a 57% chance of Bitcoin dropping to $105,000 rather than climbing to $125,000, as the market grapples with a bearish sentiment following last week’s fluctuations.
Investors are now focusing on the upcoming Nonfarm Payrolls report scheduled for Friday, with potential delays due to a possible U.S. government shutdown. Despite this uncertainty, sentiment remains bullish, particularly as Bitcoin enters what is historically considered a strong fourth quarter, marked by a median return of 52%. Shawn Young, chief analyst of MEXC Research, emphasized that Bitcoin will continue to shape market sentiment, especially with the approaching halving event on the horizon.
