The price of Bitcoin remained in a consolidation phase even as the amount held on exchanges continued to decline. Bitcoin traded at $62,540 on October 8, slightly below this week’s high of $64,500. It is still in correction after falling 15% from its highest point this year.
Bitcoin still has some potential catalysts that could drive its price higher in the coming months. Bitcoin’s reserves on exchanges continued to decline, reaching a year-to-date low of 2.34 million.
It is estimated that bitcoins worth more than $31 billion have been removed from exchanges since February. Most of these currencies have moved to self-preservation wallets, while others have been moved to ETFs.
Flows from exchanges to portfolios are often a sign that most holders are optimistic. Some prominent companies, such as MicroStrategy, Marathon Digital,Block, andTesla, are among the most bullish in the industry.
MicroStrategy has amassed more than 252,000 bitcoins while Marathon has 26,842. Tesla and Block, formerly known as Square, have 9,720 and 8,211 coins, respectively.
Additional data from Nansen shows that smart money holdings from stablecoins fell to their lowest level in years.
The figure peaked at 38.5% in May 2022 when Terra collapsed and rebounded to 35.7% in November of the same year after the FTX collapse. It has been in a strong downtrend ever since, suggesting that smart money is mostly optimistic about cryptocurrencies.
On the daily chart, Bitcoin has remained inside the bearish black channel linking the highest and lowest volatility since March. This channel can be considered a bearish broad wedge, which is a common bullish sign.
Strong Bitcoin ETFs Flows and Ethereum Recession
Bitcoin ETFs recorded $235.19 million in net inflows over the past two days, driven by renewed investor interest. Fidelity’s FBTC fund led the way with new capital of $103.68 million, while BlackRock’s IBIT fund raised, the largest Bitcoin ETF by assets, $97.88 million.
Bitwise’s BITB fund also saw inflows of $13.09 million, followed by 21Shares’ Ark andARKB fund with $12.63 million. Overall, these ETFs saw an increase in trading volume, reaching $1.22 billion on Monday, up from $1.19 billion on Monday. Friday. Meanwhile, Grayscale’s GBTC and several smaller ETFs have not reported any new inflows.
While bitcoin ETFs flourished, U.S. Ethereum ETFs failed to attract new investment on Monday. The recession followed a relatively strong performance on Friday, which saw net inflows of $7.39 million. The nine ETFs tracked by Ethereum reported a total trading volume of $118.43 million, down from $148.01 million at the end of last week. Ethereum market activity remains muted as investors await clearer economic signals and other policy guidance from the Federal Reserve. With this decision, the US government can now proceed with the sale of the defunct Bitcoin, valued at about $4.38 billion, and close the legal path of Battle Born Investments, the company that claimed rights to the confiscated bitcoin.
Overall, digital asset investment products saw outflows of $147 million last week, as strong U.S. economic data dampened hopes of a significant interest rate cut. Bitcoin products saw outflows of $159 million, while Ethereum products lost $29 million in assets.
US government to sell $4.38 billion of Bitcoin
Concerns arose over the U.S. government’s $4.38 billion sale of bitcoin following the Supreme Court’s decision in a case involving idle assets from the Silk Road dark web marketplace .
On October 7, the United States Supreme Court refused to hear a case involving the ownership of 69,370 Bitcoins seized from the Silk Road dark web marketplace. .
With this decision, the US government can now proceed with the sale of the defunct Bitcoin, valued at about $4.38 billion, and close the legal path of Battle Born Investments, the company that claimed rights to the confiscated bitcoin.
A federal appeals court in San Francisco upheld that ruling, and now the Supreme Court’s refusal to hear the case puts an end to the legal battle.
Support was also found at the 200-day exponential moving average, which is a positive sign. However, Bitcoin formed a small evening star candlestick pattern, which features a small red body and a long upper shade.
Therefore, Bitcoin will need to rise above the upper side of the shadow pattern at $64,500. After that, the bulls will need to push it above the downtrend line and then an all-time high of $73,800 to continue the uptrend.
An alternative scenario is for Bitcoin to fall below the 200-day EMA at $60,000. If this happens, it will increase the chances of falling to the underside of the wedge at $52,000.
Despite this trend, multi-asset products continued to attract attention, attracting $29 million in inflows, marking the sixteenth consecutive week of positive trends. This trend suggests that while investors are cautious about individual cryptocurrencies, diversified products remain an attractive option for those seeking broad exposure to digital assets.
