Key Points
- Bitcoin briefly touched $58K before falling to $56,691 amid heightened volatility.
- Bitcoin whales have been amassing Bitcoin, reducing selling pressure from short-term traders.
Bitcoin’s price briefly flirted with the $58K mark in the last 24 hours before retreating to $56,691 on Wednesday, during the mid-London trading session. The leading cryptocurrency experienced increased volatility today as the market reacted to the first US presidential debate between Donald Trump and Kamala Harris.
In the past three days, Bitcoin’s price has consistently closed above the crucial support level of around $56k. This has significantly reduced the fear of further crypto capitulation. The fear and greed index for Bitcoin was about 37 percent, up from 23 percent three days ago, indicating extreme fear.
Bitcoin Whales Increase Accumulation
On-chain data analysis reveals that approximately 236,155 Bitcoins, valued around $14.2 billion, have been withdrawn from various crypto exchanges. Whale investors have been offsetting the increasing selling pressure from short-term traders who are leaving the market. Following the recent jump in Bitcoin’s price, short-term Bitcoin holders sold over 14.8k BTCs, valued around $850 million.
In the past few days, a notable increase in the supply of stablecoins in crypto exchanges has boosted the overall buying pressure, presumably from institutional investors. Moreover, US spot Bitcoin ETFs have now recorded two consecutive days of net cash inflows after a period of outflows in the past two weeks.
On Tuesday, the US spot Bitcoin ETFs registered a net cash inflow of about $116 million, led by Fidelity’s FBTC and Grayscale Bitcoin Mini Trust (BTC).
Market Outlook
In the past 24 hours, several whale investors have made significant withdrawals from various crypto exchanges, including Kraken and Binance.
The Bitcoin market, along with the entire altcoin industry, is eagerly awaiting today’s US CPI data from the Bureau of Labor Statistics. This data will provide insights into the Federal Reserve’s decision on the economic outlook next week.
The probability of the Fed reducing rates next week remains high, as Canada and the European Central Banks have already initiated their respective interest rate cuts. The upcoming US general election is expected to trigger the next bullish phase as global liquidity increases.
What’s Next
From a technical perspective, Bitcoin’s price has been forming a weekly bullish flag in the ongoing correction since early March. This could result in a breakout in the fourth quarter. Furthermore, historical data suggests that Bitcoin’s price tends to perform well in the fourth quarter, compared to the third quarter.
However, Bitcoin’s bullish sentiment in the fourth quarter could be invalidated if the coin consistently closes below $50K in the coming weeks. In such a scenario, Bitcoin’s price would be headed towards the support level of around $40K.
