Bitcoin Rally Hits Fresh Risks as Spot Demand Weakens
Bitcoin's rally towards $85,000 faces new challenges as spot demand weakens and profit-taking risks rise. According to the Coinbase premium index, U.S. spot buying did not keep pace with Bitcoin's price recovery in early September. The indicator briefly improved but has since dropped.
A record $9 billion in unrealized profit among short-term holders raises concerns that they may sell and add volatility to Bitcoin's recovery. Historically, these holders have quickly locked in gains when prices weakened.
The cryptocurrency's price depends on the upcoming September Fed rate hike, oil prices, and the yen carry trade, which could create tighter financial conditions for Bitcoin.
Analysts warn that stronger buying support is needed to sustain the rally, as retail users watch the $85,000 range closely. The Federal Reserve remains a binding constraint in Bitcoin's price movement, with markets pricing in about 60% chance of a 25-basis-point Fed hike for September.