Anika Begay
Bitcoin is weak at spot rates, retreating from July 2024 highs to below $66,000. While bears are pushing, targeting the round figure of $60,000, bulls are optimistic, expecting a rebound in the coming sessions.
Technically, the $66,000-$70,000 zone is a crucial zone that buyers must decisively break out of for the uptrend to develop. Any takeoff above $72,000 would be ideal, as it is the last resistance before an all-time high around $74,000.
Bitcoin Struggles: Will Bulls Absorb Surging Exchange Inflows?
While Bitcoin may be finding strength, one analyst thinks the coin will continue to make lower lows, confirming losses for most of this week. In a post citing CryptoQuant dataThe analyst analyzed the evolution of age groups in recent years and months.
Analysts use age ranges to categorize coins based on when they were last moved on-chain. Some were moved in the last week, some in the last quarter, and some over years. The analyst noted that an analysis of these ranges indicates increasing selling pressure.
In particular, the analyst noted that large volumes of long-term holders (LTH) continue to be transferred to leading exchanges such as Coinbase and Binance. Typically, when coins are moved to exchanges, it means that the transferring entity is intent on selling, a bearish signal.
If more whales or addresses holding large amounts of BTC move their coins to exchanges, it could be a major signal that prices are about to crash.
The analyst noted that the spike in coins being transferred from LTH to major exchanges has coincided with price declines, as seen since late July 2024. While the market has matured, the analyst cautions that the influx of new coins will likely delay price recovery.
Will BTC Break Free From Weakness? Spot ETF Inflows Are Crucial
Looking at the daily chart, it remains to be seen whether the bulls will step in today and absorb the deluge of selling pressure seen this week. Immediate support is around the $60,000 and $63,000 zone. If there is a recovery above this area, Bitcoin could rally, shaking off this week’s weakness.
However, historically, the speed at which prices recover or collapse depends on inflows, mostly from newcomers. This, however, was interrupted with the introduction of spot Bitcoin ETFs in the United States.
An analyst, citing recent developments, points that the recent swing high, which took the coin above $72,000, was not supported by a spike in inflows from newcomers. Instead, as the analyst assesses, BTC prices are heavily influenced by inflows into spot ETFs, i.e., mostly institutions.
As prices fall, sentiment could be affected, leading to outflows. If more capital is withdrawn from spot ETFs, the BTC sell-off would be more severe. On August 1, all ten US spot Bitcoin ETFs saw outflows of 1,500 BTC, or over $94 million, according to data from Lookonchain.
Feature image from Canva, chart from TradingView
