![Bitcoin Demand Soars in US as Fed Hints at Rate Cuts: Report](https://cryptotale.org/wp-content/uploads/2024/08/CT_Arslan_24-Aug-2024_4900.jpg)
Bitcoin interest in the United States has surged to a 39-day high following signals from the Federal Reserve that interest rates are likely to decrease soon. In an X post on Saturday, Julio Moreno, head of research at CryptoQuant, shared insights on Bitcoin demand in the US. He noted that the demand spiked as the Fed suggested a cycle of lower interest rates could begin soon.
Coinbase Premium Index Up
According to Julio, this surge in demand is reflected in the Coinbase Premium Index. The index measures the price difference between Bitcoin on Coinbase Pro and Binance, serving as a key indicator of US investor activity compared to global markets. On the day of the Fed’s announcement, the index hit 0.0114, its highest level since July 15. This positive reading indicates strong buying pressure in the US market.
Positive readings on the Coinbase Premium Index signal increased buying activity. In contrast, negative readings can suggest a sell-off. Just before “Crypto Black Monday” on August 5, when Bitcoin’s price fell below $50,000, the index dropped below 0.10. This significant drop signaled that selling pressure was mounting at the time.
Bitcoin Demand Surges
The renewed interest in Bitcoin follows a speech by Fed Chair Jerome Powell at the annual Jackson Hole symposium. Powell hinted that interest rate cuts are on the horizon, although he did not specify when they would occur. Powell stated, “The time has come for policy to adjust,” signaling a potential shift in the Fed’s approach to monetary policy.
In response to Powell’s comments, Bitcoin’s price experienced a notable increase. As of press time, Bitcoin is trading at $64,193, marking a 5.08% rise. The cryptocurrency briefly surged to $64,957, a level it hadn’t reached since August 2, before stabilizing just below the $65,000 mark.
Fed’s Rate Cut Speculation Grows Amid Crypto Market CrashFed Market Impact
This price surge occurred just hours after the Fed’s announcement. Before the speech, Bitcoin hovered around $60,000, and there were concerns about potential selling pressure from miners. The cost of mining Bitcoin remains high, estimated at $72,224, influencing market sentiment.
Crypto analyst Will Clemente pointed out on Friday X post that despite recent fluctuations, the market has consistently valued Bitcoin below $60,000 for the past six months. This suggests a perceived value threshold that persists even amid broader market volatility.
As investors keep responding to Federal Reserve cues, daily BTC rate movements would be key to watch in the subsequent days. The potential of lower interest rates and other factors within the market could affect Bitcoin’s price even more substantially.