Bitcoin (BTC) has gone down by 2.4% in the past 24 hours after hitting our $85,000 target, as the market seems ready to take a breather after a strong rally.
This could be the first milestone in what we believe is the beginning of a fresh bull market, aided by some much-needed clarity and stability on the macroeconomic backdrop.
Last week’s interest rate hike from the Federal Reserve and subsequent comments from the head of the central bank, Kevin Warsh, gave the market some certainty concerning what’s coming in a high-inflation environment.
An additional rate hike is still on the horizon, but investors have already priced in the impact of that scenario. Now, the crypto market seems ready to recover, and net inflows to exchange-traded funds (ETFs) indicate that traders are positioning for the continuation of the late-August rally.
Investors Poured $2.7 Billion Into BTC ETFs in the Past 5 Days
According to data from SoSoValue, investors have poured $2.7 billion into Bitcoin-linked ETFs in the past 5 days, pushing the monthly total to $2.4 billion. We expect that this month’s net inflows could surpass August’s total if the price of the top crypto keeps rising.
As a result of the latest jump, nearly 73% of BTC holders are now in profit, according to on-chain data from Santiment. The last time the ratio hit this level, BTC was trading at around $89,000, meaning that the aggregated cost basis has declined.
This means that whales accumulated BTC during this latest bear market and lowered their carrying cost. That’s a positive indication of what the market thinks of the top crypto regarding to the future. Accumulation at lower price levels indicates strong conviction that the asset is undervalued.
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See all Bitcoin forecastsBTC Daily Chart Shows Signs of Short-Term Rally Exhaustion
Turning to the daily chart, we can see early signs that the selling pressure is increasing at $85,000. The token has now been dropping for three days in a row, as the market now needs additional liquidity to break past that sell wall.
A bearish divergence has popped up in the Relative Strength Index (RSI). This means that, even though the price of the token increased, positive momentum was weaker. This indicates that the latest rally has entered a phase of exhaustion.
As a result, we expect a drop to $80,000, which should be an institutional buy zone considering the psychological nature of this price mark. Meanwhile, the lower end of this bearish prediction would be $75,000 if liquidity dries up.
If these support areas hold, our next target for Bitcoin would be the $100,000 mark, aided by strong ETF inflows and a strong short squeeze if the $85K area is broken.
Hourly Chart Confirms Short-Term Trend Reversal
Moving on to a lower time frame, the 1-hour chart shows what the buy zone is if this rally is poised to continue.
A dip below the $85,100 area marked the beginning of the current correction, as bulls clearly exhausted their ammunition. Late buyers may now target $80,000 – $81,000 as their accumulation zone.
If the price stays above this level, this would confirm the continuation of the current uptrend. However, if we break below that mark, we could expect a much stronger correction to $75,500.
