Bitcoin News Today: Institutional Buys and Fed Bets Fuel Bitcoin's September Comeback Hopes

Bitcoin's price recently showed a rebound, trading above $109,000 on Monday after a nearly 5% decline in the previous week. Institutional demand played a crucial role in supporting the price as Metaplanet added 1,009 BTC to its treasury, and US spot Exchange Traded Funds (ETFs) recorded over $440 million in weekly inflows. This development occurred amid traders continuing to bet on a potential rate cut by the U.S. Federal Reserve (Fed) in September, which could support risk assets like Bitcoin.

Bitcoin's price correction came after the release of the hot US Personal Consumption Expenditures (PCE) Price Index report for July. However, the CME FedWatch tool indicates an 87.6% possibility of a 25 basis points (bps) rate cut by the Fed at the September meeting, up from an 85% chance before the PCE data publication. Fed rate cut expectations could weaken the US Dollar and boost risk-on sentiment, supporting a recovery in riskier assets such as Bitcoin [1].

Historical data from CoinGlass suggests that Bitcoin generally yields a negative return for traders in September, with an average loss of 3.50%. However, if the Fed decides to cut interest rates in September, followed by a rise in ETFs and corporate demand for BTC, traders could see positive returns in that month [1].

Despite Bitcoin's price correction, the demand from corporate companies and institutions for Bitcoin strengthened. Metaplanet's purchase of an additional 1,009 BTC highlights the sustained institutional interest in the cryptocurrency. Additionally, Bitcoin Spot ETFs recorded a total inflow of $440.71 million last week, contrasting with a $1.17 billion outflow in the previous week. If these inflows continue and intensify, BTC could see a recovery ahead [1].

Bitcoin's price faced rejection from its previously broken ascending trendline on August 23 and declined by 7.43% until Sunday. At the time of writing on Monday, it recovers slightly, trading around $109,600. If BTC finds support around $105,573, it could recover towards its daily resistance at $116,000. The Relative Strength Index (RSI) reads 41 on the daily chart, below its neutral level of 50, indicating bearish momentum. For the recovery rally to be sustained, the RSI must move above its neutral level [1].

On the 4-hour chart, BTC displays a bullish RSI divergence in play. The formation of a lower low on Monday contrasts with the RSI's higher highs during the same period, signaling a potential trend reversal or a short-term rally. If BTC recovers, it could extend the advance toward its 50-day Exponential Moving Average (EMA) on the 4-hour chart at $110,650. A successful close above this level could extend the gains toward its Friday 22 high of $117,429 [1].

However, if BTC faces a correction, it could extend the decline toward its weekly support at $104,463. Analyst Benjamin Cowen predicts that Bitcoin's dominance may rebound based on historical price patterns. If BTC bounces off the 20-week simple moving average (SMA), its dominance is expected to rise, pushing altcoins lower. Another scenario involves BTC falling below the 20-week SMA and reaching the 50-week SMA, causing altcoins to suffer [2].

Bitcoin's price reaction to these key moving averages will play a pivotal role in determining whether altseason continues. If Bitcoin rebounds from the 20-week SMA, its dominance will likely push altcoins lower. However, if Bitcoin breaks below this level, altcoins could see a sharper correction, ending their outperformance. In either case, Bitcoin's dominance is expected to increase, potentially delaying the start of altseason [2].

Source: [1] Bitcoin Price Forecast: BTC recovers above $109,000 as Fed rate-cut bets offset cautious sentiment (https://www.fxstreet.com/cryptocurrencies/news/bitcoin-price-forecast-btc-recovers-above-109-000-as-fed-rate-cut-bets-offset-cautious-sentiment-202509011005) [2] Is Altseason Over? Bitcoin's Dominance Could Rebound, Analyst Warns (https://coincentral.com/is-altseason-over-bitcoins-dominance-could-rebound-analyst-warns/)