Bitcoin rebounds above $57,000 ahead of Trump-Harris debate

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The Block2024/09/10 10:31

By:Brian McGleenon

After dropping to $52,500, Bitcoin rebounded above the $57,000 mark, triggering significant short liquidations.Analysts highlighted that upcoming U.S. political events, economic data, and the Fed’s interest rate decisions could impact bitcoin price movements.

After hitting a recent low of $52,500 last Friday, bitcoin has rebounded above the $57,000 mark, with the price volatility sparking a wave of short liquidations.

In the past 24 hours alone, $45 million worth of bitcoin positions were liquidated, with shorts accounting for the majority at $36 million. The wider cryptocurrency market experienced over $126 million in liquidations during the same period. Of these combined crypto liquidations , the vast majority — around $93 million — were short positions, according to Coinglass data .

Following today's bitcoin price uptick, BRN analyst Valentin Fournier told The Block that if the digital asset surpasses last Tuesday's local high of $59,750, it could indicate the start of a sustained bullish trend. However, he added that this depends on two key factors: Donald Trump's performance in tonight's debate against Kamala Harris and Wednesday's Consumer Price Index (CPI) reading, which might offer clues about the scale of a potential rate cut by the U.S. Federal Reserve at next week's Federal Open Market Committee (FOMC) meeting.

"Breaking above the $59,750 resistance level would be a strong signal of a potential bullish trend, and positive inflation-related news could further fuel this upward momentum," Fournier said. However, he noted that market volatility remains high, and further price declines are possible, especially as the Federal Reserve's interest rate decision approaches on September 18. "There is potential for a 'buy the rumor sell the news' dynamic around the inflation numbers and incoming interest rate cuts," he added.

Bitcoin's price movements reflect close correlation with the S&P 500

According to analysts, Bitcoin BTC +3.04% 's price movements over the past week appear to be closely tied to the U.S. equities market, with the S&P 500 experiencing its sharpest weekly decline since March 2023.

"We see the movement of bitcoin tied to the performance of U.S. equities," Bitfinex analysts told The Block. "Our view is that a major root cause of the bitcoin's downturn last week was caused by a downturn in the S&P 500; the equity index closed the week down 4.25%, the worst weekly performance for the index since March 2023."

Last week, the S&P 500 , with a market capitalization of $45.8 trillion, fell by 4.25%, while bitcoin , with a far smaller market cap of $1.07 trillion, dropped 5.45%. This showed that crypto, although increasingly correlated to equities, was now less sensitive to them than in late July, when the S&P 500 slipped 2.06%, and bitcoin tumbled 14.9% during the same period.

"This reduced sensitivity to equities' downward movements could be indicative of seller exhaustion in the bitcoin market and supports the thesis that traditional finance investors tend to de-risk from perceived tail risk assets like cryptocurrencies before equities in response to market downturns," Bitfinex analysts said.

Bitcoin posted a 3% increase in the past 24 hours and was trading at $57,010 at 5:44 a.m. ET, according to The Block’s Price Page. The price of ether increased by a more muted 1.3% to $2,347 in the same period.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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