Bitcoin poised for breakout as US money market funds reach $6.2 trillion

US money market funds have reached a new all-time high and Bitcoin may be poised for its own record-breaking price surge.

The total US money market fund has hit a new all-time high of over $6.2 trillion, mainly driven by the expectations of an upcoming interest rate cut, according to the Kobeissi Letter, which wrote in an Aug. 25 X post:

“Most of the inflows have been driven by institutional investors as they position portfolios in anticipation of Fed rate cuts… The era of high rates is coming to an end.”

Lower interest rates in the world’s largest economy could increase investor appetite for risk assets such as Bitcoin (BTC) and invite more institutional investment.

Related: Bitcoin analysts converge on a breakout in September — But is $86K possible?

Will rate cut expectations catalyze a Bitcoin breakout?

Investors are increasingly expecting an interest rate cut from the Federal Reserve at its upcoming meeting on Sept. 18.

According to the latest data from the CME FedWatch tool, the odds of a 25-basis-point rate cut currently stand at 65.5%, while the odds of a 50-basis-point rate cut are at 34.5%.

Meanwhile, the rate cut expectations could set Bitcoin price up for a rally above $68,000, according to popular analyst Titan of Crypto, who wrote in an Aug. 24 X post:

“Bitcoin heading toward $68,000 target. BTC’s 18% surge is in progress.”

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Bitcoin price could be set for $95,000 after September

While August has been historically known as a bearish month for Bitcoin, September could bring a much-awaited breakout.

Based on technical chart formations on the weekly chart, Bitcoin could be set for $95,000 next, according to popular analyst Mikybull.

The analyst wrote in an Aug. 26 X post:

“Bitcoin in its final expansion (wave 5) looking ready. $95k and then $143k price targets.”

Inflows from the US spot Bitcoin exchange-traded funds (ETFs) are also starting to increase, which is a positive sign for Bitcoin’s price action.

According to Farside Investors data, the US Bitcoin ETFs saw over $252 million worth of cumulative net inflows on Aug. 23, which is more than twice the average daily inflows of $114 million.

However, Bitcoin faces significant resistance around $65,000. A potential rally above would liquidate over $528 million worth of cumulative leveraged short positions, according to CoinGlass data.