Following the last two days of heavy downward price action, the market must be wondering if there is more to come. A bounce from $86,000 has stopped the rot for now. However, if the downward price pressure resumes, the Bitcoin price will be staring into the abyss.
U.S. Spot Bitcoin ETFs see record net outflow of $937.90 million
Michael Saylor’s Strategy (formerly Microstrategy) may have bought more than 20K BTC just recently, but the U.S. Spot Bitcoin ETFs are currently going in the complete opposite direction. A record net outflow of $937.90 on Tuesday beat the previous sell record of $671.90 million in December by quite some distance.
Over the last eleven trading days for these ETFs, there has only been one net inflow day. We now know that there are probably a lot of weaker retail hands in the ETFs, and when the market comes down, these hands sell their Bitcoin just as quickly as they would on any crypto exchange.
With the U.S. Spot Bitcoin ETFs now becoming net sellers, it is to be wondered just how much of a drag this will have on the price as the bulls try to lift the $BTC price away from the $86,000 cliff edge.
U.S. consumer confidence at recessionary low
The U.S. economy remains very much in the doldrums, as February’s Consumer Confidence Report registered the worst monthly decline since August 2021. The Expectations Index, part of the same report, and based on consumers’ short term outlook for income, business and the labour market, dropped to an index figure of 72.9, which is well below the threshold of 80, which would normally indicate a recession is due.
Just another $10,000 price swing?
Source: TradingView
The 4-hour chart for Bitcoin shows the recent price action, with the fall from $96,000 down to $86,000 taking place in only two days. That said, these $10,000 swings are starting to become more commonplace now Bitcoin has entered the rarified air of around $100,000.
As the price was on its way down, it can be seen that the major ascending trendline did hold the bears up for a little while, proving that this trendline does contain some power. Now that it has been flipped into resistance, the bulls will have their work cut out to regain it.
First things first, the bulls must get back above the bottom trendline of the descending wedge, and of course, they must hold above the 0.382 Fibonacci level. If this fails, a rapid tumble down to $73,000 would likely follow.
Bitcoin forming the next step in price structure
Source: TradingView
When zooming out into the weekly view, the major steps in price can be seen. We are now either forming the next step, which will take the $BTC price onto the next level of its bull market, or we have reached the top, and the price is coming back down to the top of the previous step at around $70,000.
Even if this is a top, with the typical bull cycle due to end perhaps in the last quarter of this year, there is time for the price to come down to the $70,000 level and then back up to maybe form a double top.
Another conjecture is that $BTC manages to hold here, and then goes on to form more price structure in order to make the current step more of a secure base. This could make things ready for that last explosive move that takes Bitcoin into the last blow-off top phase of this bull market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
