After briefly topping 58,000, Bitcoin price continued to rise, driven by short squeezes at 57,000. Long positions are currently concentrated around 56,000. On-chain data shows that there is a significant chip distribution in the 53,800-54,000 area, forming support. There are 836,000 addresses holding over 400,000 Bitcoin in the 51,000 to 54,300 range, and the average buy-in cost of these addresses could trigger selling pressure if the price approaches.
This rebound helped Bitcoin temporarily escape from the danger zone, especially the spot Bitcoin ETF ended 8 consecutive days of capital outflows and saw net capital inflows. If this continues, it will effectively prevent Bitcoin from continuing to fall.
Data from last week showed that digital asset investment products saw an outflow of $726 million, the largest since March this year. Of this, $721 million flowed out of the United States and $643 million flowed out of Bitcoin, while products that shorted Bitcoin attracted $3.9 million in inflows. Ethereum saw an outflow of $98 million, while Solana received a net inflow of $6.2 million.
Although Bitcoin rebounded, it failed to break through the key resistance level of 59,000, which is the average purchase cost of spot ETFs and the 4-hour MA200 line of Bitcoin. Bloomberg analyst Eric pointed out that Blackrock's IBIT ETF achieved a net inflow of more than US$20 billion in 8 months, breaking the argument of "spot ETF failure" and actually setting a historical record.
For Bitcoin to completely reverse, it needs to break through the 64,000 mark. The RSI indicator has been at a low level since July, and historically similar situations are usually accompanied by rebounds. The current market is at a critical turning point in September. Although there is no immediate rebound in the short term, from a valuation perspective, Bitcoin is seriously undervalued.
The Fear and Greed Index shows that market sentiment is volatile, but potential selling pressure has not been eliminated. The market performance in September is particularly important. As the Fed's interest rate decision approaches, the demand for risky assets may increase, and the current correction may be the last opportunity for accumulation.
Trump and Harris will debate today, and it will be interesting to see if they mention Bitcoin. Harris has accepted cryptocurrency donations, and if both presidential candidates support Bitcoin, it could lead to a price increase.
At the same time, the depletion of US consumer savings and the increase in credit card delinquency rates have limited the rebound space in the risk market and affected the overall economy. China's economic situation is also grim, with GDP growth falling into negative values and deflation continuing. Bloomberg believes that China is trapped in a deflationary spiral and global economic stimulus policies are difficult to reverse.
With the arrival of the global interest rate cut wave, especially the Federal Reserve's possible interest rate cut, market liquidity will increase, which provides momentum for Bitcoin to rise. Although some people predict that Bitcoin may fall to $20,000-30,000, it is unlikely that Bitcoin will experience a major crash unless there is a large-scale black swan event like a global virus.
The average price line for long-term holders has risen to 24,500, and Bitcoin will only fall below this line in an extreme bear market cycle. Although the current market is facing adjustments, it is accumulating strength for the next wave of increases. Bitcoin's historical performance shows that after each adjustment, it often enters a new upward cycle, especially after a period of volatility like 2016-2017, the Bitcoin market is relatively more stable.
That’s all for today’s article. We are currently in a bull market, and things are turbulent. We share passwords every day.
