BTC Reversing on Tuesday
The breakout move in Bitcoin ran as far as the bull channel highs yesterday, piercing the $120k before heavy selling pressure kicked in. BTC futures are now down more than 5% from yesterday’s highs. The sell off is being linked to profit taking on the initial breakout move as we tested the $120k level. However, from a macro perspective, traders are also highlighting uncertainty around incoming US tariffs and threats of fresh US sanctions on Russia.
Strategy Buys More BTC
Despite the downturn from those new all-time highs, bullish sentiment remains strong. News came this week of a further large-scale purchases from Michael Saylor’s Strategy fund which bought almost $0.5 billion worth of BTC this week, following a one-week hiatus in its buying spree. The fund now holds more than 600k units of BTC, making it the largest global holder of Bitcoin, bigger than both the US and China.
Rising Institutional Demand
Institutional demand for Bitcoin remains strong here also. Industry data points to continued buying over the last week with notal net inflows for BTC ETFs now above $150 billion. Rising institutional demand has been a key driver of the move higher in BTC and prices look poised for further gains while mainstream capital continued to move into the asset.
US Inflation on Watch
Looking ahead today, focus will be o US inflation data. BTC bulls will be hoping for a downside surprise, to cement September fed easing expectations. If we do see a low print today this should bolster risk appetite once again helping drive BTC back up. If a fresh uptick in inflation is confirmed today, however, this could see BTC correcting deeper near-term, casting doubt over a September rate cut.
Technical Views
Bitcoin
The breakout rally has stalled for now into a test of the bull channel highs, .618% Fib extension and the $120k level, with price now reversing lower. Momentum studies are cooling, suggesting room for a deeper correction. However, the broader bull outlook remains while price holds above the $108,855 level with the 1:1 Fib extension at $136,395 the next target for bulls.
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