Bitcoin Price News: Soft ETF Outflows Favor Quick Recovery to $120K

Bitcoin (BTC) has shed 6.6% in the past 7 days as Friday’s crash pushed the token below the $120,000 level shortly after it hit a new all-time high.

However, yesterday’s net outflows on BTC-linked exchange-traded funds (ETFs) seem to be indicating that what happened last week was a liquidation cascade and not a bullish capitulation.

Data from Farside Investors shows that only $326 million was taken out of these vehicles on Monday. Comparatively, BTC ETFs had received nearly $6 billion in net inflows and accumulated a 9-day positive streak until last Thursday.

Hence, this minor setback seems to show that investors are still on board despite the significant decline that the top crypto experienced during the weekend.

BTC Open Interest Drops by 12% Amid Flash Crash

Even at $113,000, BTC has still delivered a 21% gain on a year-to-date basis, closely following Ethereum, whose price has jumped by 24% during this same period.

Nonetheless, a handful of technical indicators still call for some degree of caution in regard to the future of the crypto market.

Bitcoin’s Open Interest (in BTC) – Source: CoinGlass

First of all, open interest (OI) declined dramatically as a result of last Friday’s drop. Currently, this metric sits at 656,840 BTC after an 11.5% decline in just a few days. Measuring OI in BTC terms is typically a better choice to help offset the impact of price swings from this metric.

Although it has been progressively climbing from a low level of 624,400, this low reading means that traders are not ready to jump back into the market.

Moreover, market sentiment is still depressed as reflected by the Fear and Greed Index. This gauge currently stands at 42, meaning that investors have adopted a cautious attitude following last Friday’s events.

In addition, the market is waiting for further clarity on how the Federal Reserve will react to Trump’s hostile measures against China. If the U.S. central bank believes that this tariff increase will result in higher inflation down the road, it could opt to postpone the interest rate cut that it was supposed to execute this month.

The Chairman of the Fed, Jerome Powell, abstained from making any comments concerning future interest rate decisions during his speech at the National Association for Business Economics conference in Philadelphia on Tuesday.

If the Fed opts to delay its 25bps rate cut this month, this could have a catastrophic impact on crypto prices immediately, as this was the market’s consensus view.

Investors Accumulate BTC at $110K – Big Bounce Coming?

BTC has bounced off a key demand zone at $110,000 that is in confluence with both a trend line and horizontal support.

BTC/USD Daily Chart (Bitstamp) – Source: TradingView

This is the third time that this trend line has been hit, and the price has reacted positively right after, which increases its relevance from a technical standpoint.

Trading volumes in the past few days have also exceeded the 14-day moving average, which points to significant buying pressure at this level.

Based on what these technical indicators show, unless another black swan event like Trump’s Truth Social post on Friday hits the market and catalyzes another cascade liquidation, the odds that BTC will make a strong comeback seem high from a technical standpoint.

The first target in this case would be the $120K area, followed by a much stronger push to $130,000 if positive momentum builds up.