Bitcoin’s Resilience Amid Legal Triumphs and Institutional Interest Spurs Fresh Trading Activity, Posing a Question on Macroeconomic Impact
In a month marked by sideways movement, Bitcoin (BTC) has displayed remarkable resilience, buoyed by key developments, including the victory of Grayscale in its lawsuit against the U.S. Securities and Exchange Commission (SEC) regarding the transformation of the Grayscale BTC Trust into a spot Bitcoin ETF.
Recent data from Glassnode reveals an intriguing trend in the Bitcoin market. The amount of supply that has remained dormant for the past 6 months to 1 year, as indicated by a 1-day moving average, has surged to a six-month high. This uptick in the last active supply of BTC coincided with Grayscale’s legal triumph, signaling a potential shift in market dynamics.
Bitcoin Surges Amid Legal Wins And Institutional Interest
Traditionally, a surge in the supply last active over 6 months is associated with increased trading activity during either a bull market or a sell-off. The recent legal victories and the enthusiasm surrounding spot Bitcoin ETFs have ignited fresh interest and trading in the crypto sphere.
The Grayscale lawsuit victory comes from another groundbreaking judgment in cryptocurrency: the XRP lawsuit Summary Judgment. These legal triumphs have contributed to a positive sentiment among investors. Large financial institutions like Blackrock have been flocking to the SEC, seeking approval for spot Bitcoin ETFs, indicating growing institutional interest in the crypto market.
While these developments have bolstered optimism, there remains a lingering question about the impact of the U.S. macroeconomic environment on the cryptocurrency’s momentum. As the U.S. Federal Reserve prepares for its Federal Open Market Committee (FOMC) meeting on September 19-20, 2023, the CME FedWatch Tool records a staggering 98% likelihood that the Fed will maintain its current interest rate target of 525-550 bps.
Over the past two years, Bitcoin has experienced significant volatility in response to the Federal Reserve’s rate decisions. However, 2023 has seen a departure from this trend, with the crypto market showing greater stability amid expectations of monetary policy easing, including potential rate cuts or pauses.
As BTC continues to chart its course in the face of legal victories and ETF developments, all eyes are on the macroeconomic landscape and the upcoming FOMC meeting for clues about its future trajectory.