Key Points
- Bitcoin’s fear and greed index has dropped to its lowest level in a year due to increased crypto capitulation fear.
- Bitcoin price is on the brink of confirming a macro double top reversal, signifying a possible downside in the near future.
The German government has recently increased its sales of Bitcoin (BTC), leading to a significant rise in crypto capitulation fear. This has resulted in Bitcoin’s fear and greed index plummeting to its lowest point in the past year, approximately 25 percent as of Friday.
The price of Bitcoin is teetering on the edge of confirming a macro double top reversal. This is supported by the weekly bearish divergence on the Relative Strength Index (RSI).
Bitcoin Price Trends
Notably, the Bitcoin price has consistently closed below the neckline of the double-top reversal. This indicates a potential decline in the near term. Furthermore, Bitcoin has failed to regain the 200-day Moving Average (MA) as a support level.
In recent weeks, it has become increasingly clear that the Bitcoin price reached a local top of around $73k. This signals a stronger midterm correction. Despite this, on-chain data reveals that institutional investors and long-term traders have stepped up their BTC accumulation pace.
Institutional Investment in Bitcoin
The demand for US spot Bitcoin ETTs is gradually increasing, with more than $700 million in cash inflows recorded over the past four days. On Thursday, the US spot Bitcoin ETFs registered a total cash inflow of approximately $78.93 million, led by BlackRock’s IBIT and Fidelity’s FBTC.
The German government has continued to offload its Bitcoin holdings, which currently stand at about 6.39K BTCs, worth roughly $365 million. The Bitcoin industry has shown its maturity by comfortably absorbing nearly $2 billion in sustained sales from Germany’s government without major capitulation.
Economic Factors Impacting Bitcoin
On Thursday, the United States Bureau of Labor Statistics released the monthly and annual report on the consumer price index (CPI), signaling easing inflation. This news, which represents the lowest readings since early 2021, has increased the odds for an interest rate cut in September. Major prediction markets suggest the odds of a September interest rate cut increased to 80 percent from 65 percent before the CPI data.
The European Central Bank and the Bank of Canada have already initiated respective interest rate cuts in the recent past.
Midterm Targets for BTC Price Action
From a technical perspective, Bitcoin price is facing a challenging few weeks ahead. The flagship coin must consistently close above $61K to invalidate possible capitulation towards the next liquidity range between $40K and $50K.
However, Bitcoin price cannot afford to consistently close below $40K in the near term if the $100K target by the end of this year is to be achieved.
