Despite recent bearish sentiments, Bitcoin (BTC) surprised the market by rallying above $27,000 in September.
The surge in price, which peaked at $27,400 on Monday before retracing to around $26,800 in the early Asian market on Tuesday, has rekindled hopes for a bullish trend in the cryptocurrency space.
This unexpected spike comes as the market anticipates high-impact news events later this week.
There hasn’t been any major news announcement responsible for this recent bullish rally. However, institutional investors seeking a hedge against rising inflation have been increasingly drawn to the cryptocurrency market.
Just last week, the European Central Bank (ECB) raised interest rates for the 10th consecutive time, hitting an all-time high of 4%.
This move is aimed at curbing soaring inflation, with projections indicating that inflation in the region could reach as high as 5.6%.
On Wednesday, the United States Federal Reserve is set to hold a press conference and provide updates on the economic outlook and current interest rates. Wall Street analysts anticipate the Fed to pause its interest rate hikes at 5.50%.
Thursday will see the Bank of England (BoE) releasing an update on its monetary policies and the official bank rate.
These high-impact news events can significantly impact Bitcoin’s price action, as crypto investors and traders closely monitor any signs of economic weakness that might lead to a recession, prompting them to invest in Bitcoin.
Additionally, Bitcoin’s low annual inflation, currently at about 1.70%, is expected to be cut in half during next year’s halving event.
This has led institutional investors to exhibit increasing demand for the leading digital asset as a hedge against high inflation.
