The German government continued with its Bitcoin sell-offs but US spot BTC ETF investors and whales accelerated the accumulation pace.
Bitcoin (BTC) price jumped over 2 percent in the past 24 hours to briefly trade above $59K on Wednesday during the early European session. The flagship coin, however, struggled to rally beyond the 200-daily Moving Average (MA) after consistently closing below this level in the past few days.
The fear of further crypto capitulation is still prevalent across the industry. Bitcoin’s fear and greed index was around 28 percent on Wednesday, down from 44 percent last week.
Bitcoin price has signaled midterm bearish sentiment after closing below $61K last week, thus confirming a possible double top backed by a bearish divergence on the weekly Relative Strength Index (RSI).
As a result, unless Bitcoin price reclaims the support level around $61k in the coming weeks, further capitulation towards $48K will be inevitable.
Bitcoin Whales Grabs the Opportunity
After the BTC price experienced a significant resistance level of around $73k, the network has since registered heightened on-chain activity in the past few weeks, led by whale traders. For instance, a top Bitcoin whale purchased 10K Bitcoins amid the recent capitulation.
As #Bitcoin dipped to $54,000 yesterday, a buyer snapped up nearly 10,000 $BTC, totaling around $540 million! pic.twitter.com/0RPJwDFxqD
— Ali (@ali_charts) July 9, 2024
As Coinspeaker pointed out, the US-based spot BTC ETFs have registered a net cash inflow of more than $600 million in the past three days led by BlackRock’s IBIT. More institutional investors have been accumulating Bitcoins regardless of the price volatility.
However, the German government has been on a selling spree in the past three weeks, having offloaded more than half of its initial Bitcoin holdings. According to on-chain data analysis provided by Arkham intelligence, the German government currently holds about 23.96k Bitcoins, worth approximately $1.4 billion.
Meanwhile, the Mt. Gox repayments are expected to continue in the coming three months before the defunct FTX begins distributing around $16 billion to creditors.
Economic Outlook
The crypto industry has continued to widen the correlation with the stock market, despite the mainstream web3 adoption led by institutional investors. However, the crypto industry is anticipating a major bullish breakout if the U.S. Fed initiates interest rate cuts later this year. Thursday’s US CPI data and Friday’s PPI data will further shed light on the economic outlook.
Nonetheless, the upcoming US general elections have been described as a bullish trigger for the entire crypto industry. Already, the crypto issue has emerged as an important topic in the presidential campaigns from both sides of the political aisle.
Long-term Picture
Bitcoin price is in a macro-rising trend akin to the 2017 bull run that ended in early 2018. Although Bitcoin price may drop as low as $48k in the coming weeks, most analysts believe the digital asset will close this year trading at least $100k.
Moreover, the upcoming listing of spot Ether ETFs in the United States will trigger further cash inflows to crypto investment products.
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