Bitcoin Price Analysis: BTC Rallies But Faces Test At $115,000

Bitcoin (BTC) surged past the $113,000 level on Wednesday, following the release of the August Producer Price Index (PPI) data. PPI data reinforced market expectations of a rate cut, boosting risk assets like BTC. 

The flagship cryptocurrency is marginally up during the ongoing session, trading around $114,050. Analysts expect some volatility in the short term. However, the long-term outlook remains positive. 

Spot Bitcoin ETFs Register Strong Inflows 

Spot Bitcoin ETFs registered healthy inflows on September 10, thanks to a substantial jump in institutional interest. According to data from Farside Investors, net inflows reached $741.5 million, indicating strong demand for Bitcoin ETFs. According to Farside, the data could indicate a shift in market sentiment as traders eye inflows for clues on the asset’s price trajectory. FBTC led the inflows with $299 million, followed by BlackRock’s IBIT, which registered $211 million in inflows, and ARKB with $145 million. Other notable contributions were from BitB ($44 million), GBTC ($8.9 million), and EZBC ($3.3 million. 

Investors Retreat As Stocks Slide 

Bitcoin treasury companies have suffered a significant decline in share prices as the initial euphoria recedes. Bitcoin and crypto treasury companies use shares or debt to raise funds to purchase the crypto held on their balance sheet. Investors have been purchasing shares of treasury companies, driven by BTC’s ascent to record highs and President Trump’s crypto-friendly approach. According to reports, at least 61 countries have adopted Bitcoin treasury strategies. 

Michael Saylor’s Strategy has seen its share price tumble from $457 to $328, the lowest since April. The decline also cuts their gains to 13%. Meanwhile, Japanese Bitcoin treasury firm Metaplanet dropped to its lowest levels since May, with shares down 60% from their June peak. Kaiko analyst Adam McCarthy stated, 

“The scale of the reversal is entirely unsurprising. These are all essentially volatility plays as they are leveraged exposure ... so if bitcoin is down 3%, they're down a multiple of that, sometimes four or five times as much. For retail users, it's a shock a lot of the time, so it probably compounds the downturn when some sell out of fear.”

When shares of these treasury companies drop, their market value could become less than the value of their crypto holdings. These companies also rely on cash to purchase crypto. Sometimes, funding can dry up when market sentiment wanes. Lale Akoner, global market analyst at eToro, stated, 

“Beyond their bitcoin exposure, most (companies) have only modest fundamentals, so their valuations don't have much of a cushion.”

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) is struggling to get going during the ongoing session, as it comes up against the resistance around $115,000. The flagship cryptocurrency rallied on Wednesday, surging past the $113,000 mark and settling at $113,983. It started the day flat, trading around the $114,000 mark. However, sentiment picked up marginally as BTC crossed $114,000 and moved to its current level of $114,457. 

Meanwhile, Consumer Price Index (CPI) data revealed that inflation rose 0.4% in August, compared to a 0.2% rise in July. According to the Bureau of Labor Statistics report, inflation has increased 2.9% over the past 12 months, pulling away from the 2% target set by the Federal Reserve. However, markets are optimistic about a rate cut after the FOMC meeting, although a smaller cut is expected. 

Producer Price Index (PPI) data also came in cooler than expected. The August PPI fell 2.6% year-over-year compared to forecasts of 3.3%. Meanwhile, Core PPI, which excludes food and energy, fell to 2.8%, well below the expected 3.5%. The PPI turned negative every month, marking the second contraction since March 2024. 

“BREAKING: August PPI inflation FALLS to 2.6%, below expectations of 3.3%. Core PPI inflation fell to 2.8%, below expectations of 3.5%. Month-over-month PPI inflation was NEGATIVE for just the 2nd time since March 2024. Rate cuts are on their way.”

July inflation figures were also revised from 3.4% to 3.1% and Core PPI from 3.7% to 3.4%. Additionally, a US Jobs Data revision removed 911,000 jobs from the past 12 months. 

BTC registered a sharp drop on Friday (August 29), dropping nearly 4% to $108,378. The price recovered on Saturday, rising 0.41%, but was back in the red on Sunday, falling 0.53% to settle at 108,247. Price action was positive on Monday as BTC rose almost 1% to cross $109,000 and settle at $109,240. Bullish sentiment intensified on Tuesday as the price rallied, increasing 1.84% to cross $111,000 and settling at $111,247. BTC posted a marginal increase on Wednesday, rising 0.46% to $111,756. Despite the positive sentiment, the price lost momentum on Thursday, dropping to an intraday low of $109,321 before settling at $110,720.

Source: TradingView

Despite the positive sentiment, BTC lost momentum on Thursday, dropping to an intraday low of $109,321 before settling at $110,720. The price rallied to an intraday high of $113,390 on Friday but could not stay at this level. As a result, it fell to $110,670, ultimately registering a marginal decline. Price action was mixed over the weekend, with BTC falling 0.41% on Saturday and settling at $110,212. It recovered on Sunday, rising nearly 1% to reclaim $111,000 and settle at $111,129. Buyers retained control on Monday as BTC reached an intraday high of $112,940. However, it could not stay at this level and fell to $112,072, ultimately rising 0.85%. BTC lost momentum on Tuesday, dropping 0.47% to $111,549. Bullish sentiment returned on Wednesday as BTC rallied, rising over 2% to cross $113,000 and settle at $113,983. The current session sees the price marginally up, trading around $114,200 as buyers look to push beyond $115,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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