Spot Demand Fuels Bitcoin Rally Amid Rate Hike Concerns

A recent Bitfinex market report indicates that Bitcoin's latest price increase was driven primarily by spot demand, rather than excessive leverage. This development is seen as a positive sign for the market, suggesting it can withstand selling pressure if conditions become unfavorable.

The analysts highlighted sustained ETF inflows as crucial in counteracting the potential impact of a Federal Reserve rate hike in September. According to CoinMarketCap data, BTC has been trading around $78,731, up almost 1% in 24 hours but down 2.32% over the past seven days.

The rally was fueled by sustained ETF demand, short covering, and Treasury buybacks. However, it lost momentum after hitting resistance at higher levels, with Federal Reserve Chair Kevin Warsh's comments on potential interest rate hikes adding pressure, pushing the price to a low of $76,587.