Several factors are influencing the dynamics of Bitcoin’s price, making it a viable investment asset. Capital inflows into Bitcoin ETFs are now a significant determinant of Bitcoin’s price. On Monday, August 26, Bitcoin’s price broke through $65,000, but has since declined. This development comes at a time when many Bitcoin investors are moving their holdings to cold storage in anticipation of a rate cut in the United States in September.
The Bitcoin price has fallen by about 1.5% over the past 24 hours, trading at around $62,779.73 BTC/USDT on the Gate.io cryptocurrency exchange. In general, the asset’s price decline coincided with the rest of the cryptocurrency market, with major coins and tokens losing value to a small degree. Despite the small losses, the overall market still looks bullish. There is some good news for the top cryptocurrency, with the Bitcoin ETF sector seeing notable inflows.
On August 26, BlackRock’s Bitcoin exchange-traded fund (ETF) saw its highest inflow in the past 35 days. On that day, IBIT recorded an inflow of $224.1 million. This was the largest inflow since July 22, when it recorded $526.7 million. In line with the cryptocurrency market trend, investors took advantage of the Bitcoin price decline.
As you can see in the image, the Bitcoin price fell over the weekend, giving some investors the opportunity to acquire more coins. This rebound came after the price surged from $58,000 to $65,000 on August 25. On the other hand, the recent increase in capital inflows into Bitcoin ETFs shows that institutional investors are willing to invest in cryptocurrencies even when the price is volatile. It is important to note that several Bitcoin ETFs also saw significant inflows on August 26.
Previously, ETFs also saw significant inflows in the week ending August 23, when ETFs recorded a total inflow of $543 million. Once again, IBIT recorded the largest inflow with $318 million. The recent increase in capital inflows was also influenced by the decision of the US Federal Reserve to cut interest rates by 50bp at the September 2024 FOMC meeting.
Bitcoin investors moved $5 billion worth of Bitcoin in 30 days.
Meanwhile, CryptoQuant says there has been an increase in the transfer of Bitcoin to cold storage, as it expects the Bitcoin price to rise over time as interest rates in the US are likely to be cut. The following diagram shows the transfer of Bitcoin for long-term storage.
As you can see from the graph, the exchange reserves have decreased. This suggests that the Bitcoin price may rise in the coming weeks. The exchange reserves are the amount of Bitcoin held on cryptocurrency exchanges. For example, on July 5, the exchange reserves were 759,823 BTC. However, by August 25, it had decreased to 2,677,614 BTC. This means that around 82,209 BTC, or around $5 billion, were moved to cold storage for safekeeping.
A decrease in foreign exchange reserves is bullish because it reduces the likelihood of an immediate increase in selling pressure on the asset. Second, it shows that most investors are confident that the Bitcoin price can rise in the future. This shows that sentiment in the cryptocurrency market has improved.
Bitcoin Price Prediction
The Bitcoin price has fluctuated significantly over the past few weeks, but has failed to break $70,000. The current bullish trend needs confirmation that it can continue. A Bitcoin bullish continuation signal can only occur if the price breaks $68,000. At that point, it would have closed above the bullish flag pattern on higher time frames. A break above this level would likely start a stronger rally than before.
However, as Bitcoin price is turning downward, it is likely to find its strongest support at the $61,000 level. This development could also help build upside price momentum. Cryptocurrency analyst Gart Van Lagen believes Bitcoin is forming a cup and handle formation, supporting its sustainability.
If Lagen’s suggestion is correct, Bitcoin could have a strong breakout in the coming weeks. In other words, if Bitcoin and other major cryptocurrencies show a strong consolidation, a breakout is likely to occur soon. Therefore, such a scenario could force most altcoins to rally. If this situation coincides with other developments, Bitcoin price could rise to $100,000.
Several key indicators, such as Keltner Channel, Average Daily Range, and Ichimoku cloud, show that Bitcoin is bullish. The Ichimoku on the weekly chart shows a green futures cloud.
As observed in the diagram, the clouds are green and rising gently. However, as the Ichimoku clouds flatten out at the end, the volatility may be low.
Also Read: SEC Approves BlackRock’s Bitcoin ETF Options Trading on Nasdaq