On Thursday evening, Bitcoin (BTC) returned above the $112,000 mark after finding critical support earlier in the week. This recovery was partially fueled by interest surrounding the Bitcoin Asia conference in Hong Kong. However, traders remain cautious, as demand in the spot market is neutral and sentiment in perpetual contracts is still quite fragile.
Bitcoin surges alongside a major event in Asia
On Thursday, Bitcoin bounced back above the $112,000 mark, demonstrating impressive resilience after a 12% correction from the historical peak of $124,474 set in mid-August. Market sentiment has also somewhat improved due to the official opening of the Bitcoin Asia event in Hong Kong, which is expected to attract up to 15,000 attendees and become the second largest Bitcoin conference in the world.
Taking place over two days, the event emphasizes the rapidly increasing adoption and prevalence of BTC in Asia. In 2023 alone, the Asia-Pacific region accounted for up to 43% of the total global cryptocurrency ownership, with explosive growth in Indonesia, Thailand, Vietnam, and the Philippines.
In parallel, Hong Kong is working to solidify its role as an international cryptocurrency hub through the 'Policy Statement 2.0' and the Stablecoin Act – seen as a testing ground for China’s digital assets, where the industry is still banned.
This year's conference gathers over 200 international speakers, including many prominent names recently announced such as Adam Back – CEO of Blockstream, Changpeng Zhao – founder of Binance, and Balaji Srinivasan – an entrepreneur who gained attention for purchasing a private island to establish a 'Network School'.
Institutional demand remains stable
This week, institutional inflows into Bitcoin remain stable. According to data from SoSoValue, spot Bitcoin ETF funds attracted a net inflow of $81.25 million on Wednesday, marking three consecutive sessions of recorded inflows since the beginning of the week. If this momentum continues to strengthen, Bitcoin could fully extend its recovery.
Some signals to watch for
Glassnode's report published on Wednesday shows that spot demand for Bitcoin (BTC) remains neutral, while the perpetual contract market is trending downward but still quite fragile.
Observing the chart below, the 30-day moving average of Cumulative Volume Delta (CVD) compared to the 180-day median on major exchanges like Coinbase and Binance has recently approached the level of 0. This marks a clear shift from the strong buying power in April – a factor that previously pushed BTC's price from $72,000 to higher levels. Despite a slight uptick in July that helped BTC reach nearly $124,000, the current overall trend still reflects a neutral spot sentiment, indicating buyers are lacking decisiveness at the current price range.
Meanwhile, the picture in the derivatives market is somewhat more pessimistic. The futures chart shows that since July, the CVD indicator has continuously plunged into negative territory, reflecting increased selling pressure. This indicates that perpetual contract traders – who tend to be heavily speculative – are leaning more towards short positions in the recent correction.
Bitcoin price forecast: BTC rebounds after testing critical support
Last weekend, Bitcoin was rejected at the support line that it had previously broken and fell over 5% by Monday, closing below the 100-day exponential moving average (EMA) at $110,884. However, BTC saw a slight recovery the next day and continued to find support around this range on Wednesday. As of Thursday afternoon, the price had risen above $112,000.
If the 100-day EMA at $110,884 continues to act as support, Bitcoin could extend its bounce towards the next resistance level at $116,000.
The relative strength index (RSI) on the daily chart is currently at 46 and is trending towards the neutral zone of 50, indicating that selling pressure is weakening. For a sustainable recovery, the RSI needs to surpass this threshold.
Conversely, if selling pressure continues, BTC may retreat to the next support level at $103,922, corresponding to the 200-day EMA.