Bitcoin exchange-traded products once again became the top choice for institutional investors for the week ending September 27, as capital flowed into cryptocurrency funds after BTC recovered above $66,000.
According to CoinShares’ latest report released on September 30, cryptocurrency asset investment products recorded inflows totaling $1.2 billion during the weeks of September 23 and September 27 for the third consecutive week.
According to the report, the lion’s share of capital flows have gone into Bitcoin (BTC) investment products, with $1 billion, or about 87% of the total, flowing in over the past seven days. Bitcoin funds also led the monthly performance with $1.1 billion in inflows in September, pushing total assets under management (AuM) to $74.6 billion.
Flow by asset. Source: CoinShares
Meanwhile, Ethereum (ETH) investment products recorded an inflow of $87 million, ending five consecutive weeks of negative flow. CoinShares said this was “the first measurable inflow since early August.” However, monthly outflows to date have amounted to $60 million, according to the report.
Inflows into all cryptocurrency investment products totaled $1.2 billion, with total AuM increasing 6.2% last week to $92.7 billion.
James Butterfill, head of research at CoinShares, believes the high inflows could be a “reaction to continued expectations of dovish monetary policy in the United States” and the positive market sentiment associated with it.
“The approval of options on certain U.S.-based investment products appears to have boosted investor sentiment.”
Data from Alternative, a platform that analyzes ‘feelings and sentiments’ about cryptocurrency, supports this. The cryptocurrency fear and greed index was found to have reached its highest level since July 31.
The chart below shows that 1ndex has entered ‘greed’ territory at 61, up from 30 a month ago when the market was gripped by ‘fear’.
Cryptocurrency Fear and Greed Index. Source: alternative.me
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Bitcoin price encounters resistance above $65,000.
From September 6 to September 27, Bitcoin rose 26.5%, pushing the price of BTC to a local high of $66,840. The price was later revised to trade at $63,815 at the time of publication.
“Brief rejection of $65,000, the critical level that would cause a breakdown in the bear market structure,” McKenna, a well-known cryptocurrency analyst, said in a tweet on September 30.
According to McKenna, breaking this barrier would end the broader downward trend that has left Bitcoin price stuck in a downward parallel channel since breaking off its all-time high in March.
“Prices are currently in a downward trend, but if this breaks down the market will see a sharp uptrend. Dips are for buying.”
BTC/USD daily chart. source: TradingView
Clearing data from Coinglass shows a total of $342.32 million in liquidity orders positioned between $65,000 and $66,000, reinforcing the solidity of this resistance level.
BTC liquidation heatmap (screenshot). Source: Coinglass
Bitcoin bulls would therefore need to push the price above this level to ensure a recovery, with the next major barrier lying between the psychological level of $68,000 and the 2021 all-time high of $69,000.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.