As an experienced analyst, I have closely monitored the Bitcoin market for years, and I cannot help but notice the correlation between Bitcoin Exchange Traded Fund (ETF) outflows and the price action. The recent surge in ETF outflows has been a major contributor to the current downturn in Bitcoin’s price.
As a crypto investor, I’m observing the Bitcoin price struggle to break above the $65,000 mark, with the nearest support level found at $64,000. The upward momentum that began after the drop from $70,000 seemed to lose steam on Wednesday. If selling pressure intensifies during the US trading hours, Bitcoin may be compelled to plunge through additional support levels at $62,500 and $60,000, respectively. This downward movement could potentially provide the necessary liquidity for a subsequent rebound.
Bitcoin ETF Outflows Gush As BTC Struggles For Direction
Bitcoin Exchange-Traded Funds (ETFs) have significantly boosted market optimism since their introduction in January. With these funds enabling institutional investors to purchase bitcoin through regular stock market channels, the surge in demand contributed to the cryptocurrency reaching an unprecedented peak of approximately $73,000 during Q1.
Certain altcoins reached new heights alongside Bitcoin recently, with Ethereum hitting a high above $4,100 and Solana at $206. However, many altcoins have suffered substantial losses since last week, reflecting the disappointing performance of the Bitcoin spot ETF during April and parts of May.
For the past several months, CoinGape’s analysts have observed the connection between the Bitcoin price and the performance of the ETF. A noticeable pattern has emerged: when large-scale withdrawals occur from the ETF, Bitcoin experiences a significant drop or fails to gain direction, eventually leading to consolidation.
As a crypto investor, I’ve noticed that the Bitcoin price remained steady at around $64,945 during US trading hours. However, data from SoSoValue indicated a significant outflow of $152 million from Bitcoin ETFs on June 18. This outflow has been ongoing since the Federal Open Market Committee (FOMC) meeting and the Federal Reserve’s firm stance against interest rate cuts. Consequently, the total net inflow has decreased to $14.81 billion.
If the positive sentiment surrounding Bitcoin fails to bounce back, the price drop could persist through the remainder of the week.
In alignment with Coinglass’ data, the Bitcoin futures market open interest has decreased from its peak of $37 billion to $36.4 billion. Although this decline is not substantial, it may signal the initiation of a downward trend. A decrease in open interest suggests waning trader interest and typically precedes further market downturns.
The Next Bitcoin Price Support?
As a researcher studying the Bitcoin market, I’ve observed that when the price dips below the significant level of $65,000, it indicates that sellers currently hold more power. Furthermore, the Relative Strength Index (RSI) has descended into the neutral territory, registering at 39. If this trend persists, we might witness an amplified decline toward the next support at $64,000.
The MACD indicator’s sell signal aligns with the pessimistic market conditions, as the expanding red bars beneath the zero line undermine any optimism for an imminent price rebound.
As a financial analyst, I’ve noticed that the Money Flow Index (RSI) has dropped to a level of 23, indicating it’s now in the oversold territory. Consequently, based on this technical analysis, the most likely direction for the market trend would be downwards.
As a researcher studying Bitcoin (BTC) price movements, I would advise traders to take note of the significant support level at $64,000. However, they should also remain vigilant and be prepared for potential drops in BTC’s value, reaching as low as $62,500 or even $60,000. From these levels, Bitcoin could rebound and initiate a robust recovery, potentially leading to a breakout above the $70,000 mark.
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2024-06-19 19:26