Key takeaways:
September’s 44,000 BTC net withdrawals reduced the available supply, easing the potential short-term selling pressure.
US-listed spot Bitcoin ETFs added $2.2 billion, delivering persistent daily demand that far exceeds the mined supply.
Bitcoin (BTC) has traded in a narrow 2.3% range since Friday as investors await the United States Federal Reserve’s interest rate decision on Wednesday. While the immediate impact of an interest rate cut on Bitcoin remains uncertain, three independent factors are supporting further BTC price gains.
The sharp decline in BTC held on exchanges has become critical for short-term price formation. Glassnode estimates a net withdrawal of 44,000 BTC in September alone, reversing the high deposit activity from July. With fewer coins readily available, immediate liquidity is tighter, which could limit short-term selling pressure near the current $116,000 price level.
Reduced BTC supply, growing spot Bitcoin ETF demand
Some argue that the 2.96 million BTC still held on exchanges is enough to absorb buying volume. However, this view overlooks the fact that a large portion of those coins are not offered on order books. Many clients keep Bitcoin deposits on exchanges due to concerns about self-custody or to benefit from features like yield opportunities or reduced fees.
Additional support at the $115,000 mark comes from ongoing accumulation through spot Bitcoin exchange-traded funds (ETFs). This trend has helped restore investor confidence after gold’s 11% outperformance since August. US-listed Bitcoin ETFs recorded $2.2 billion in net inflows between Wednesday and Monday, representing daily buying pressure more than 10 times greater than the amount of new Bitcoin mined each day.
Eric Trump’s CNBC interview on Tuesday drew attention to Bitcoin’s unique qualities. US President Donald Trump’s son is personally invested as the co-founder of the Bitcoin mining and treasury management company American Bitcoin (ABTC). Eric Trump said Bitcoin is the “greatest asset of our time,” describing it as a modern version of gold and an effective hedge against weakness in the real estate sector.
Bitcoin might not react to Fed interest rate cuts
Bond markets are pricing in a 96% chance that the Fed will trim rates to 4.25% from the current 4.5%. This suggests Bitcoin could react modestly to Wednesday’s announcement. Press conference remarks from Fed Chair Jerome Powell will be more decisive in signaling whether rates will continue trending down. Should inflation remain a significant risk, Bitcoin’s trajectory toward $120,000 may face resistance.
Still, a new financial signal emerged this week that could point to deeper stress in markets. On Monday, US banks borrowed $1.5 billion from the Fed’s Standing Repo Facility, a move that Reuters said reflected “tightness in meeting funding obligations.” Overnight lending rates also climbed to 4.42% on Friday, marking the highest reading in two months.
This uncertainty fueled a surge in gold prices, which hit an all-time high on Tuesday. Regardless of the Fed’s exact decision on interest rates, Bitcoin could rally past $120,000 as demand strengthens through spot ETFs, corporate reserve strategies, and its role as an independent hedge — an advantage reinforced by Eric Trump’s remarks.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
