Bitcoin demand rebounded against the backdrop of ETF outflows and miner concerns, raising doubts about market stability.
As volatility resurfaces, the market sentiment surrounding Bitcoin has undergone a significant shift. The Bitcoin Sentiment Index currently stands at 44.9%, falling below the neutral range, which has shifted the focus to bearish sentiment. Considering that market sentiment was still around 70% in mid-March, this drop is quite significant.
Compounding this instability is the fact that Bitcoin's price recently soared to $88,000 on April 2, only to sharply decline shortly thereafter to around $74,500. This rollercoaster price fluctuation highlights the current turmoil in the market, further intensifying investors' cautious attitudes as they weigh their next steps.
The participation of institutional investors in Bitcoin has significantly weakened, exacerbating the general anxiety in the market. Spot ETF holdings have drastically decreased, falling from 1.19 million BTC in March to 1.115 million BTC in early April. This drop has breached the critical warning line of 1,116,067 BTC, raising concerns about significant withdrawals by institutional investors.
This pullback indicates a shift from the sustained accumulation trend observed with ETFs for most of 2024. Although some retail interest seems to be rekindling, the weakening of institutional confidence may pose long-term challenges to Bitcoin's price stability.
Additionally, the behavior of miners indicates that they are holding onto cautious Bitcoin, with the Miner Position Index (MPI) soaring nearly 40% in just 24 hours. This increase typically suggests that miners are selling part of their holdings, either to take profits or to prepare for potential price declines. The dual impact of ETF outflows and miner sell-offs may complicate Bitcoin's recovery trajectory significantly.
From a technical analysis perspective, Bitcoin recently broke through a downward trend line, igniting market optimism for a potential bullish reversal. Currently, Bitcoin is trading at approximately $84,100, having slightly increased by 0.29% in the past 24 hours. Moreover, a clearly visible double bottom pattern on the chart in recent trading days suggests further bullish prospects.
Currently, the major range support is fluctuating between $77,200 and the resistance level of $88,500. These two levels are crucial for market dynamics. For Bitcoin to gain upward momentum, it must decisively break through the resistance level of $88,500 to pave the way for testing the $94,500 level. In the short term, Bitcoin has been in a narrow fluctuation of around 3,000 points.
The path forward remains fragile until Bitcoin can convert this resistance into support, remaining highly sensitive to macroeconomic impacts and continuously changing on-chain indicators, keeping traders and investors on high alert.
The current state of the Bitcoin market presents a mix of cautious optimism and underlying threats. Although there are signs of recovery in demand and technical breakthroughs, the negative effects of ETF outflows and changes in miner strategies bring significant uncertainty. Investors should remain vigilant and closely monitor market indicators and broader economic changes when navigating this turbulent market landscape.
Intraday entry strategy.
Southbound $85,500: Risk control 780 points: Target around 2000 points.
Northbound near $83,000: Risk control 480 points: Target 1200 points.
In the short term, focus on $83,000 here; if there is no solid drop, the rebound will continue.
