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Bitcoin has broken through the $81,000 level for the first time in four months, fueling growing expectations that the crypto market‘s bearish phase is coming to an end. Easing concerns over Federal Reserve rate hikes and a decline in U.S. long-term Treasury yields have driven the recovery in investor sentiment. Bernstein has set a year-end price target of $150,000, and the market is eyeing the upcoming September FOMC meeting as the next inflection point. However, September’s seasonal weakness and unstable ETF fund flows remain key variables that could determine whether the rally can be sustained. Major altcoins including Ethereum and Ripple also posted gains.
Key Elements
Bitcoin has surged past the $81,000 mark for the first time in four months, spreading expectations that the crypto winter is drawing to a close. The rally comes as concerns over Federal Reserve rate hikes ease and U.S. long-term Treasury yields decline, restoring investor confidence.
According to CoinMarketCap on the 4th, Bitcoin briefly touched $82,000 in morning trading, after jumping more than 5% the previous day to break through $81,000. This marks the first time Bitcoin has exceeded the $81,000 level since May. The cryptocurrency gained 25% during August and has continued its upward momentum into early September.
The immediate catalyst for this rally was commentary from Federal Reserve officials. Fed Governor Christopher Waller said on the 3rd (local time) that he could support holding interest rates steady if upcoming inflation data confirms easing price pressures. His remarks helped temper rate-hike concerns that had intensified after Fed Chair Kevin Warsh signaled a hawkish stance in his Jackson Hole speech.
As rate-hike fears subsided, the yield on the 30-year U.S. Treasury bond fell from an intraday high of 5.337% on the 18th of last month to 5.246% the previous day. Analysts note that the U.S. Treasury’s long-term bond buyback program is also providing medium- to long-term support for the digital asset market.
Signals of a Crypto Winter Ending
Market participants are increasingly interpreting Bitcoin’s recent price action as a signal that the bear market has bottomed. Noelle Acheson, author of “Crypto Is Macro Now,” said that “Bitcoin’s recent price movements show that the ‘crypto winter’ is coming to an end.”
Bernstein analyst Gautam Chhugani offered a more specific price target. “As long as the U.S. Treasury intervenes in the market to cap rising bond yields, buying pressure on alternative assets like Bitcoin will continue,” he said, adding that “when we determined Bitcoin had bottomed earlier this year, our year-end target was $150,000.”
Bitcoin currently trades approximately 35% below its all-time high of $126,000 recorded in October of last year. It is down roughly 7-11% from the start of the year.
FOMC as the Next Inflection Point
Market attention is now focused on the Federal Open Market Committee (FOMC) meeting scheduled for September 15-16. David Grider, chief investment officer at Finality Capital, projected that “after the FOMC, digital assets and equities could rally together, potentially pushing Bitcoin higher than current levels by late September or early October.”
He explained that the uptrend could continue if the Fed holds rates steady contrary to market expectations, or if Treasury yields fall sharply after the first rate hike. However, if equities undergo a correction, Bitcoin—being a risk asset—could decline in tandem, though experts lean toward any such pullback being short-lived.
ETF fund flows are another signal worth watching. According to Glassnode, during this rally, the 7-day average inflow into U.S. spot Bitcoin ETFs reached as high as $290 million per day at one point. However, flows remain unstable, with two significant outflows occurring last week.
September Seasonality Remains a Wildcard
Bitcoin has historically shown weakness in September. Over the past 15 years, September returns have been negative on nine occasions. However, the cryptocurrency has broken from this seasonal pattern over the past four years.
Sean Farrell, head of digital asset strategy at Fundstrat, noted that “seasonality is a useful reference point but not a perfect market indicator,” adding that “Bitcoin has been breaking the September weakness trend in recent years.”
The Crypto Fear & Greed Index provided by CoinMarketCap stood at 78 on the day, indicating “greed” territory. The index ranges from 0 (extreme fear) to 100 (extreme greed).
Meanwhile, altcoins also rallied in tandem. Ethereum traded at $2,506, up 4.95% from the previous day, while Ripple gained 7.00% to $1.44.
Market participants remain divided on whether the rally can be sustained in the near term. Tony Sycamore, analyst at IG Australia, noted that a significant portion of August’s gains stemmed from short-position liquidations, and that current market positioning is close to neutral. He suggested that if Bitcoin pulls back to the mid-$70,000s, buying support could emerge near the 200-day moving average at $69,507.
Glassnode raised the possibility that long-term holders may take profits in the $83,000-$86,000 range. Rashi Zhang, research analyst at Bitget Wallet, explained that if Bitcoin can sustain levels above $82,000, with stable ETF inflows and restrained funding rates, it would serve as a clearer signal that the market is preparing for its next leg higher.
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Source: finance.biggo.com