Saturday, November 16, 2024

Positive on-chain metrics and increased ETF inflows boost Bitcoin outlook

Must read

Bitcoin’s price has broken above the consolidation zone between $57,000 and $62,000, signaling an impending rally ahead. This surge in price was largely driven by Federal Reserve Chairman Jerome Powell’s confirmation of an interest-rate cut in the US, scheduled for September. The positive market sentiment following this news led to a 10% increase in Bitcoin’s price last week, with the cryptocurrency closing above $64,000.

US spot Bitcoin ETFs also saw significant activity, recording net inflows of $506.40 million last week. This influx of funds into Bitcoin ETFs indicates growing investor interest and confidence in the cryptocurrency market. Monitoring these ETFs’ net flow data is crucial for understanding market dynamics and investor sentiment, as it provides insights into the movement of institutional money into the crypto space.

On-chain data further supports the bullish outlook for Bitcoin, with indicators like the Miners Position Index (MPI) and funding rates showing positive signs. The MPI, which measures the ratio of miners’ outflows in USD to the 365-day moving average, decreased from -0.63 to -1.46, indicating reduced selling pressure from miners. Additionally, funding rates, which reflect traders’ sentiments in the perpetual swaps market, are positive at 0.008, suggesting bullish sentiment and buyer dominance.

From a technical analysis perspective, Bitcoin’s price has broken above the 200-day Exponential Moving Average (EMA) at $62,280 and its 61.8% Fibonacci retracement level at $62,042. This breakout indicates a strong bullish momentum, with the potential for a 7% rally to retest the July 29 high of $70,079 if BTC closes above the $65,596 level. Momentum indicators like the Relative Strength Index (RSI) and Awesome Oscillator (AO) on the daily chart support this bullish thesis, showing strong bullish dominance.

However, it is essential to monitor key support levels to validate this bullish outlook. A close below the August 21 low of $58,783 could lead to a 5% decline towards daily support at $56,022, setting a lower low on the daily chart and invalidating the bullish thesis.

In conclusion, Bitcoin’s price breakout above the consolidation zone, coupled with positive on-chain data and technical indicators, suggests a potential rally ahead. With growing investor interest, institutional inflows, and favorable market conditions, Bitcoin’s price outlook remains optimistic as it continues its upward trajectory in the crypto market.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article