Crypto Outlook: BTC starts the week in the reds

Bitcoin’s price seems to have continued in its downwards trajectory, with the coin currently below $60000. In this report, we aim to shed light on the possible factors aiding to the recent developments in combination with a crypto technical analysis of Bitcoin.     

Crypto: Overview Report

Outflows from BTC ETFs

According to data from SoSoValue, US-Listed BTC ETF’s recorded $71 million  in net outflows last Thursday, with the surprise coming from BlackRock’s IBIT which recorded outlfows of roughly $13 million for the second time ever.

Hence, given that BlackRocks IBIT ETF is the largest bitcoin fund when considering assets under management, the announcement of net outflows for the second time in the particular fund’s history may have had a negative impact on the coin’s price, as it may imply that traditional investors may be exiting the market.

Moreover, the wider net outflows in BTC ETFs may have weighed on Bitcoin’s price, as the negative implications of a widespread reduction in demand, could further weigh on the coin’s price should the outflows continue in the future.

Powell’s dovish comments and their possible impact on BTC’s price

On deeper fundamental level for the markets we continue to highlight the Feds’ intentions as a factor that could also affect cryptocurrencies. In particular, Fed Chairman Powell’s speech indicated that interest rate cuts lay ahead for the Fed in his speech regarding the US economic outlook and the Fed’s monetary policy at the Jackson Hole Economic Symposium.

Specifically, Fed Chair Powell’s comments that ‘The time has come for policy to adjust’ tended to intensify the market’s expectations of a rate cut by the Fed in their next monetary policy meeting. Overall, the dovish implications of a rate cut by the Fed in their September meeting, may have opened the door for investors to funnel funds into more “riskier” assets such as Bitcoin which may have seen outflows due to concerns about a possible recession in the US economy.

Therefore, the implications of an easing of the tight financial conditions surrounding the US economy, may aid cryptocurrencies and in particular Bitcoin given its status as the “King of Crypto”. However, should other US financial releases lead to market participants returning to their risk-averse nature, it could instead funnel outflows from cryptocurrencies such as bitcoin which in turn may weigh on the coin’s price.

US Presidential race heats up

The US Presidential race is heating up, with just two months remaining until the primaries, recent polls are showing Vice President Kamala Harris outpacing Former President Trump. In particular, ABC’s 538 polls show VP Harris leading Former Pres Trump by roughly 3% in the national polls with VP Harris at 47.1% and Former President Trump at 43.8% as of September 1^st.

The possibility of VP Harris winning the US Presidential may be perceived as a negative for cryptocurrencies, as between the two candidates, former President Trump is a more outspoken supporter of crypto and in particular Bitcoin, with the former President having implied that he would support the creation of a strategic Bitcoin reserve. Therefore, the widening gap in the polls between Harris and Trump may weigh on Bitcoin’s price, should Harris maintain or even extend her lead against her opponent leading up to the election.

On the flip side, should Trump manage to narrow the gap or even surpass Harris in the polls, it may be perceived as a positive indication for Bitcoin’s future and thus could support the coin’s price. However, we should note that these are the national polls and thus greater emphasis may be placed in battleground states which may determine the results of the US Presidential elections.

Crypto Technical Analysis

BTC/USD Daily Chart

• Support: 56600 (S1), 52000 (S2), 47100 (S3) 
• Resistance: 61100 (R1), 63500 (R2), 69300 (R3)  

BTC/USD appears to be moving in a downwards fashion. We opt for a bearish outlook for the coin and supporting our case is the RSI indicator below our chart which currently registers a figure near 40, implying a bearish market sentiment.

Moreover, we would also like to note the clear break below our upwards moving trendline which was incepted on the 6th of August, which may further support our aforementioned bias. For our bearish outlook to continue, we would require a clear break below the 56600 (S1) support level, with the next possible target for the bears being the 52000 (S2) support line.

On the flip side, for a sideways bias we would require the coin’s price to remain confined between the sideways moving channel defined by the 56600 (S1) support level and the 61100 (R1) resistance line.

Lastly, for a bullish outlook we would require a clear break above the 61100 (R1) resistance level with the next possible target for the bulls being the 63500 (R2) resistance line.

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Crypto CFDs are an extremely high-risk, speculative investment and you may lose all your invested capital. Before trading, you need to ensure you fully understand the risks involved taking into consideration your level of experience and investment objectives. Seek independent advice, if necessary.