Bitcoin‘s attempts at a recovery this week have encountered resistance as selling pressure intensified during the American trading session. Nevertheless, downward potential seems limited as markets observe distinct trading dynamics across different regions. While Asian markets demonstrated strength, gains made were frequently erased by U.S. traders.
Bitcoin Exhibits Divergent Behavior during U.S. Stock Market Hours
During U.S. stock market hours, Bitcoin’s performance diverged from the optimism seen among Asian traders. Despite the excitement surrounding the recent launch of Bitcoin and Ethereum exchange-traded funds (ETFs) in regions like Hong Kong, sentiment in Wall Street-backed U.S. spot ETFs painted a contrasting picture.
Amidst escalating outflows and diminishing institutional buying, demand for Bitcoin has waned. Notably, Thursday saw $11.3 million in outflows from ETFs in the U.S. with Grayscale experiencing the most significant negative flows at $43.4 million. Conversely, BlackRock reported positive ETF flows totaling $14.2 million after two consecutive days of zero flows.
While overall net flows remained negative, the absence of outflows from most ETF providers besides Grayscale suggests a potential trend shift, albeit muted by stagnant volumes. The influx of sellers into the market contrasts starkly with the initial phase of ETF launches when buyers dominated. As more investors hold ETFs, the pool of potential sellers expands, exerting downward pressure on Bitcoin prices.
Indicators Point Towards a Possible Bottom
Santiment data indicates a decline in social dominance and social volume metrics, hinting at reduced mainstream discussion and diminished FOMO (fear of missing out). This decrease often correlates with lower asset volatility.
With fewer buy calls and increased sell signals, particularly in the U.S., the probability of market recovery rises. Mentions of ‘buy the dip’ strategies are on the rise, signaling a polarized sentiment among traders. A noticeable level of apprehension among traders suggests the possibility of a relief rally.
While historical trends post-halving and ETF launches suggest bullish sentiment, Bitcoin’s trajectory towards $80,000 and beyond hinges on whale and shark behavior, dormant BTC addresses re-entering circulation, and network realized profits versus losses, among other factors.
Bitcoin Price Outlook
Bitcoin’s price consolidation within a falling wedge pattern on the one-day timeframe indicates a temporary pause in a downtrend. A breakout above the upper trendline of this pattern could signal a bullish reversal, potentially leading to a 20% move above the breakout point towards the $71,116 area.
On the one-week timeframe, the $60,660 support remains intact, with the Relative Strength Index (RSI) indicating a prevailing uptrend until a lower high is confirmed. However, a breach of the $55,473 support or a one-day close below $56,000 could invalidate the bullish thesis.
