What Triggered Bitcoin's Latest Price Surge?

Last week, the Federal Reserve reduced its interest rate by 50 basic points, allowing increased cash flow in the United States. Two days after the rate

Bitcoin (BTC) price surged past the $64,000 mark on Sep. 20, continuing a rally that began with the Federal Reserve reducing its interest rate by 50 basis points last week.

However, while BTC price rallied by 6.8% over the past 24 hours, the spot market seemed to be lagging behind the derivatives market in terms of activities.

As a result, some analysts now believe that the recent rally in BTC price might be largely driven by futures and perpetual contracts.

Bitcoin open interest hit highest since early August

According to the latest weekly market report by Bitfinex, bitcoin’s open interest drove the latest surge instead of spot trading, implying that the futures and perpetual markets saw the most investor engagement.

The exchange’s analysts added that the crypto asset’s open interest “outpaced the price gains of BTC itself.”

Data from blockchain analytics platform Coinglass shows that bitcoin open interest recently attained $34.9 billion, marking the highest level since early August.

Meanwhile, the total value locked (TVL) in decentralized finance (DeFi) protocols also surged to $153.4 billion, up from $144.2 billion the week prior.

Spot Bitcoin ETF inflows might push BTC price to $65,200

Bitfinex analysts also noted that increased engagement with the spot Bitcoin exchange-traded fund (ETF) could drive the leading cryptocurrency to reclaim prices closer to its peak value of $73,800.

Over $397.2 million flowed into the U.S.-traded spot Bitcoin ETFs in the past week, an increase from the $332.3 million recorded the week before.

“This uptrend in ETF inflows could propel Bitcoin to reclaim prices closer to its peak value of 73800 if the trend continues.”

The market report adds that the leading crypto asset could unlock the $65,200 price resistance from late August if this trend of Bitcoin ETF inflows continues.

“Should Bitcoin breach the key resistance levels from late August, this could propel the asset towards new highs, coinciding with the end of summer’s low liquidity. However, without sustained spot buying, consolidation or a partial correction seems the most likely scenario

Altcoins also see price increases, but top 10 coins lag behind

Aside from bitcoin, other crypto assets have also seen a notable increment within the past month. Bitfinex referenced SUI and AAVE as altcoins that unlocked a 100% price increase in August and September.

On the other hand, altcoins that do not belong to the top 10 coins by market capitalization have not increased, as revealed in an index showing the data.

Still, open interest in these assets has soared from $10.74 billion in August to $11.48 billion.

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