Bitcoin ETF Reverses Course, Sparking Initial Optimism
The US Spot Bitcoin ETF reversed its course on Thursday, November 6, ending a six-day streak of outflows. This development initially boosted market optimism, suggesting a potential regaining of confidence from institutions in digital assets. The positive sentiment was further supported by an inflow into the US Spot Ethereum ETF, which also recorded its first inflow since October 28. However, this enthusiasm appeared short-lived as the broader crypto market experienced a dip, and the Bitcoin price also saw a plunge. Latest on-chain data suggests selling pressure from retail traders, possibly enabled by a slight recovery in BTC USD to $103.5k yesterday, which may have provided an exit opportunity for many. Despite the ongoing selling pressure and gloomy momentum, the recent inflow into the US Spot Bitcoin ETF has fueled hope among experts, with some highlighting key BTC price levels to watch for breakout confirmation.
The US Spot Bitcoin ETF recorded an inflow of $239.9 million on November 6, marking the end of its six-day outflow streak. Over the preceding six sessions, the investment instrument saw nearly $2.04 billion in funds drain, a trend that had spooked market participants. The latest inflow reflects a renewed institutional interest in the flagship crypto and has spurred discussions about whether this development could contribute to a future recovery for the BTC price.
On Thursday, November 6, BlackRock's IBIT led the influx with $112.4 million. Fidelity's FBTC and Ark Invest's ARKB also reported inflows of $61.6 million and $60.4 million, respectively, with no outflows recorded on that date. The previous outflow streak was notably led by the BlackRock Bitcoin ETF. Many are interpreting the latest buy activity in IBIT as a buy-the-dip opportunity taken by BlackRock following the recent plunge in BTC price.
What's Next for Bitcoin Price?
The renewed momentum in the US Spot Bitcoin ETF has bolstered market optimism, yet the BTC price momentum has weighed on traders' sentiment. At the time of writing, the BTC USD price was down 1% and trading below $102k. Analyst Rekt Capital noted that historically, Bitcoin USD has peaked 518 days after the Halving in 2017 and 550 days after in 2021. With the current BTC price standing at 566 days post-Halving, it appears to have already reached its peak.
Rekt Capital has highlighted the necessity of a lengthened cycle to sustain Bitcoin's bull run. In contrast, expert Captain Faibik offers a more optimistic outlook. According to Faibik, the Bitcoin USD chart exhibits a Descending Broadening Wedge formation, indicating a potential bullish continuation towards $117,000 if the $107,000 resistance level is breached.
Reasons Behind BTC Price Decline
The dip in BTC price, despite the reversed track of US Spot Bitcoin ETF fund flows, has sparked discussions about potential reasons for the retreat. While some interpret the current scenario as the beginning of a bear market, others anticipate a rebound. One attributed factor for the current dip is investors shifting their focus from cryptocurrencies to stablecoins. Analyst Ali Martinez noted that stablecoin reserves on exchanges have surged by nearly $10 billion in the past month, indicating that traders are moving their assets into more stable investments.
This shift suggests a risk-off sentiment among investors, who appear to be seeking shelter in stablecoins amidst market volatility. Analyst Ted points to another factor contributing to Bitcoin's decline: selling pressure from key regions. The US has emerged as the largest seller of BTC, followed by Asia and the EU. Ted notes that without spot bid activity, there is little chance of a recovery.
The selling pressure from the US is also evidenced by the Coinbase Bitcoin Premium Index. The Coinbase BTC Premium was at -0.0548 during writing, according to CoinGlass data. This indicates selling pressure in the US market and a waning risk-bet appetite among traders. Furthermore, the decline in the US stock market could have also triggered selling pressure in the crypto market.
While Bitcoin ETF inflow has turned positive, other factors continue to weigh on market sentiment. For a potential rebound, BTC price must break through the $107k resistance level, with increased participation from retail traders.