Bitcoin’s (BTC) price hovers around a key resistance level of $60,000 as of Tuesday’s trading session. Recent data shows that Bitcoin ETFs recorded net inflows of approximately $13 million over the past week.
From my perspective, these inflows into ETFs reflect sustained demand among institutional investors, which is likely to boost Bitcoin’s price gains and strengthen its upward trajectory in the medium to long term.
However, Bitcoin reached its lowest annual level for the third consecutive week last week, as the cryptocurrency markets continued to stabilize following the market crash. Net inflows to cryptocurrency exchanges amounted to around $418 million, including a government transfer to Coinbase Prime.
I believe that the U.S. government’s transfer to Coinbase Prime was not intended for sale but rather a conversion to Coinbase Prime through an official partnership. We can say that even with the decline in Bitcoin’s price, institutional demand remained sustained, as evidenced by the $13 million in inflows to ETFs. This comes as the odds of a U.S. recession over the next year have dropped to 20%, especially after the recent retail sales and unemployment data.
Markets are now more confident that the U.S. Federal Reserve will cut interest rates by 0.25% at its September meeting, though they also price in the possibility that another negative surprise in jobs data on September 6 could lead to a 0.5% cut.
U.S. stocks rose last week on the back of July’s retail sales figures, which exceeded analysts’ estimates in the largest increase since early 2023. Unemployment figures also show a drop to a one-month low in the previous week.
In my view, Bitcoin traders might benefit from a rate cut, but there is also a risk that this could signal the possibility of a recession, in which case we could see a deep downward correction in Bitcoin, similar to what happened in 2019.
To clarify, when the Federal Reserve cut interest rates in July 2019, Bitcoin initially rose by 20% in a short-term rally. Despite two additional rate cuts by the Federal Reserve later that year, Bitcoin ended 2019 down 35% from its peak following the first rate cut. This does not necessarily mean the same will happen this time, especially given the current global turbulence.
In conclusion, recession expectations by the end of 2025 remain unchanged at 45%, as markets are grappling with uncertainty related to the global political, economic, and geopolitical landscape. I believe that if Bitcoin manages to hold above the $60,000 level today, the next rally could reach all-time highs and potentially set new peaks in the medium to long term.
Technical analysis of BTC/USD prices
From a technical perspective, the bearish momentum remains strong as Bitcoin’s price struggles to overcome key resistance levels, with momentum indicators appearing weak and consolidated. However, investor behaviour and recent data on Bitcoin mining activity suggest a reduction in selling pressure, providing some support for the price.
Bitcoin’s price continues to move sideways between $57,115 and $62,066, which are the 38.2% and 61.8% Fibonacci retracement levels, respectively, drawn from the high on July 29 to the low on August 5.
If we assume that Bitcoin’s price rises again to the 61.8% Fibonacci retracement level at $62,066, it might encounter some resistance at this level, as it aligns with a previously broken trendline and the 100-day exponential moving average around $62,226, making it a key resistance zone. Breaking through this level would be considered the start of a strong upward trend.
BTC/USD – Prices Chart MT4 –-XS.com
Failure to surpass and hold above $62,066 for a full day could lead to a decline towards $57,115, followed by a potential 19% drop to revisit the daily support level at $49,917.
On the daily chart, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) are both trading below their neutral levels of 50 and zero, respectively, indicating weak directional momentum at the moment.
On the other hand, if Bitcoin’s price manages to close above $62,066, a rally towards the August 2 high of $69,596 could be likely, as this is the highest level on the daily chart for the current price wave. This could lead to an additional 6% increase to test the weekly resistance at $69,648.
Support Levels: $59,973 – $58,466 – $57,030
Resistance Levels: $61,707 – $64,920 – $66,116
