Key Points
- Bitcoin (BTC) price fluctuates amid midterm economic outlook, with a recent drop to $58K but gradual rise since August 5 market crash.
- US-based spot Bitcoin ETFs record two consecutive days of cash outflows after significant cash inflows last week.
The price of Bitcoin (BTC) has been oscillating between bullish and bearish trends in the context of the midterm economic outlook. Despite a recent decline from $65K to just above $58K, the premier cryptocurrency has been on a steady upward trajectory since the market crash on August 5. However, the Bitcoin price is still caught in a macro correction that started earlier this year after it hit an all-time high of approximately $73.7K.
Technical Analysis and Future Predictions
From a technical perspective, the Bitcoin price has been forming an inverted triangle, typically followed by a significant bullish surge. The weekly Relative Strength Index (RSI) has been consolidating above 50 percent over the past two months, despite the noticeable bearish sentiment. If the Bitcoin price action in the 2024/2025 bull market mirrors previous cycles, the fourth quarter and the first half of next year could see a bullish trend.
In the coming weeks, the Bitcoin price could fall below $55K before rebounding towards a new all-time high in the following months. Additionally, Bitcoin’s fear and greed index has fallen below 30 percent, suggesting many investors are deeply concerned about potential crypto capitulation in September.
Spot Bitcoin ETFs’ Performance
US-based spot Bitcoin ETFs have recorded two consecutive days of cash outflows after substantial cash inflows last week. On Tuesday, they ended an eight-day cash inflow after reporting $127 million in cash outflows, largely driven by ARK 21Shares Bitcoin ETF (ARKB). ARKB led other spot BTC ETF issuers on Wednesday, with a cash outflow of around $105 million. Consequently, the US-based spot BTC ETFs have net assets under management of about $54.32 billion.
Moreover, Hong Kong spot Bitcoin ETFs have not seen any significant cash inflow since August 22. This suggests that the liquidity flow to Bitcoin products has significantly decreased compared to earlier this year. On-chain data indicates that more short-term Bitcoin holders have accelerated profit-taking recently. However, the supply of Bitcoin at centralized exchanges remains at a multi-year low, implying that long-term investors continue to hold in anticipation of bullish sentiments ahead.
The Overall Market Scenario
The Bitcoin price has demonstrated a positive correlation with the altcoin market, following the approval of spot Ethereum and Solana ETFs in the US and Brazil respectively. The expected interest rate cuts in the United States, following the dovish outlook from the Fed last week, in addition to the upcoming US elections will likely trigger bullish sentiment for the entire crypto space in the subsequent months.
