Bitcoin Stays Above Key Support as $300M Flow to BTC ETFs – $120K Next?

Bitcoin (BTC) has booked a 2.5% gain in the past 7 days as the crypto market has progressively recovered from its latest pullback.

Investors’ attitude remains cautious as indicated by the Fear and Greed Index, which currently sits at 44 – meaning that sentiment is neutral.

Market Consensus Estimates for Inflation (August) – Source: FX Empire

The market is preparing for this week’s inflation data, which is scheduled to be published on Thursday. The consensus estimate from analysts is that annual inflation will rise to 2.9% – 20 basis points higher than a month ago – while core inflation is expected to remain unchanged at 3.1%.

Meanwhile, next week will be important for the markets as well as the majority of analysts expect that the U.S. Federal Reserve will cut interest rates by 25 basis points – the first cut to be executed this year.

Lower-than-expected inflation levels may confirm this view as the Fed won’t have any deterring elements that push it to pause the cut.

Bitcoin ETFs Brought In $123M in Positive Net Inflows Last Week

Data from Farside Investors show that Bitcoin spot exchange-traded funds (ETFs) took in $364 million on Monday, starting the week on a strong note even though BTC is advancing at a slow pace.

Last week, these vehicles managed to bring in $123 million in total during a week as BTC bounced off $108,000. This indicates strong accumulation and could anticipate an upcoming surge as market participants realize that the pullback has ended.

After hitting a low level of $21 billion on Saturday, trading volumes are once again rising and closed yesterday above $40 billion while they have increased by 23% in the past 24 hours.

Bitcoin’s Open Interest in BTC – Source: CoinGlass

Open interest in BTC futures is also rising again. This metric still stands at a high level compared to historical levels indicating that traders’ interest during this cycle has not yet faded.

If the Fed cuts rates as expected, that could have a positive impact in the mid-term for BTC and could push the token back to the $120,000 level and possibly beyond as technical analysis favors a bullish outlook.

Daily Chart Favors Bullish Outlook for BTC

Looking at the daily chart we can see that BTC bounced off the $108K last Tuesday and has stood above this area since then, possibly as the market keeps accumulating.

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

The lack of movement at this point is not a bad sign, especially as the market’s structure remains bullish. The price is above the 200-day exponential moving average (EMA) and we did not break these lower highs. Hence, BTC could be getting ready for the next leg up and ‘smart money’ knows it.

The Relative Strength Index (RSI) has sent a buy signal upon rising above the 14-day moving average. As long as the price stays above $108K, we should witness a move toward $120K first within the next few days and then to $130K if we break out above the latest all-time high.

Inflation data could catalyze the next big move for BTC depending on how the numbers shape up compared to analysts’ expectations. Lower than expected inflation levels could propel the token as they would give the Fed enough reasons to cut rates as planned.