Bitcoin (BTC) is pushing back above $113,000 on Thursday, gaining 1.7% and outperforming the broader crypto market, which is up 1.2% to $3.91 trillion. This rebound comes as risk sentiment improves and tech giant Nvidia reported earnings that calmed fears of an AI bubble, possibly signaling a shift in market focus back to Federal Reserve policy and interest rate cut expectations.
Nvidia’s Performance Boosts Risk Appetite
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Nvidia’s earnings report exceeded expectations, delivering earnings per share of $1.05 on $46.74 billion in revenue. This marks the ninth consecutive quarter of revenue growth exceeding 50%. As a key player in the AI sector, Nvidia’s performance often influences broader market sentiment. The close relationship between tech stocks and cryptocurrencies means Nvidia’s results can directly impact digital asset prices. With Nvidia’s strong showing, anxieties about an overvalued AI trade appear to be subsiding, allowing investors to concentrate on the Federal Reserve’s next moves.
Fed rate Cut Bets Hinged on PCE Data
The market currently anticipates an 87% probability of the Federal Reserve implementing rate cuts in its September meeting. This outlook remains largely unchanged following Federal reserve Chair Powell’s recent dovish remarks. The upcoming release of the U.S. Core Personal Consumption Expenditures (PCE) price index is the next major catalyst that could sway these expectations. Economists forecast Core PCE to inch up to 2.9% year-over-year. This data point follows last week’s cooler-than-expected inflation figures, though some reports indicated hotter-than-forecast consumer prices. Any indication that inflation, as measured by the Fed’s preferred gauge, is accelerating could dampen rate cut hopes and put downward pressure on Bitcoin.
ETH ETF Inflows Could Temper BTC Gains
Institutional interest in crypto remains robust. Data from SoSoValue indicates that Bitcoin ETFs saw $81.25 million in net inflows on Wednesday, extending a three-day streak of positive flows. Continued inflows could provide further support for Bitcoin’s price. However, Ethereum (ETH) ETFs are attracting substantially more demand, recording $307 million in net inflows on Wednesday. This trend extends beyond institutional investors, with large Bitcoin holders, or “whales,” also showing increased interest in ETH. last week, a long-term Bitcoin whale famously swapped 22,400 BTC for ETH, a move that coincided with ETH reaching a record high and Bitcoin experiencing a price dip. This significant rotation into ETH could potentially limit Bitcoin’s upward momentum and increase its vulnerability.
Bitcoin’s Technical Picture
Bitcoin struggled to reclaim a multi-month rising trendline resistance, previously falling 5% and closing below its 100-day moving average, hitting a low of $108.5k. However, the asset has since rebounded, moving back above $110k and trading at $113k. The Relative Strength Index (RSI), while below 50, is trending upwards, suggesting that selling pressure might be easing.
if Bitcoin can maintain support at the 100 moving average, it could target $116.6k,the 50-day moving average,and last week’s high. A break above that level could pave the way for a test of $120k, with the record high of $124.4k in sight.
conversely,a failure to hold the 100 moving average could lead to a decline towards $105k,the 38.2% Fibonacci retracement level, and potentially the 200-day moving average around $103k.
