United States money market funds have reached a new all-time high, and Bitcoin may be poised for its own record-breaking price surge.
Total investments in US money market funds have hit a new all-time high of over $6.2 trillion, mainly driven by the expectations of an upcoming interest rate cut, according to the Kobeissi Letter, which wrote in an Aug. 25 X post:
“Most of the inflows have been driven by institutional investors as they position portfolios in anticipation of Fed rate cuts […] The era of high rates is coming to an end.”
Net inflows into US money market funds. Source: The Kobeissi Letter
Lower interest rates in the world’s largest economy could increase investor appetite for risk assets such as Bitcoin (BTC) and invite more institutional investment.
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Will rate cut expectations catalyze a Bitcoin breakout?
Investors are increasingly expecting an interest rate cut from the Federal Reserve at its upcoming meeting on Sept. 18.
According to the latest data from the CME FedWatch tool, the odds of a 25 basis-point rate cut currently stand at 65.5%, while the odds of a 50 basis-point rate cut are at 34.5%.
Odds of an interest rate cut. Source: CME FedWatch
Meanwhile, the rate cut expectations could set Bitcoin price up for a rally above $68,000, according to popular analyst Titan of Crypto, who wrote in an Aug. 24 X post:
“Bitcoin heading toward $68,000 target. BTC’s 18% surge is in progress.”
BTC/USD, 1-day chart. Breakout, moving average convergence/divergence crossover setup. Source: Titan of Crypto
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Bitcoin price could be set for $95,000 after September
While August has been historically known as a bearish month for Bitcoin, September could bring a much-awaited breakout.
Based on technical chart formations on the weekly chart, Bitcoin could be set for $95,000 next, according to popular analyst Mikybull.
The analyst wrote in an Aug. 26 X post:
“Bitcoin in its final expansion (wave 5) looking ready. $95k and then $143k price targets.”
BTC/USD, 1-week chart. Source: Mikybull
Inflows to the US-based spot Bitcoin exchange-traded funds (ETFs) are also starting to increase, which is a positive sign for Bitcoin’s price action.
According to Farside Investors data, the US spot Bitcoin ETFs saw over $252 million worth of cumulative net inflows on Aug. 23, which is more than twice the average daily inflows of $114 million.
Bitcoin ETF flows (USD, million). Source: Farside Investors
However, Bitcoin faces significant resistance around $65,000. A potential rally above would liquidate over $528 million worth of cumulative leveraged short positions, according to CoinGlass data.
Bitcoin exchange liquidation map. Source: CoinGlass
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