Key Points
- Bitcoin (BTC) trading is close to critical support levels, with spot traders beginning to accumulate the asset.
- Significant liquidity inflows into Coinbase suggest ongoing accumulation and potential anticipation of a rally.
Bitcoin, the world’s largest cryptocurrency, is currently trading well below its peak levels. The digital asset is valued at just above $81,000 after a near 2% decline in 24 hours.
With Bitcoin’s trading nearing its critical support levels, spot traders have started accumulating the asset. This scenario prompts an analysis of other factors that might influence a possible price increase in the near future.
Spot ETF Outflows Decrease
Recent data indicates a significant drop in BTC outflows from exchange-traded funds (ETFs) over the past month.
After hitting a peak of $1.01 billion outflows on February 25, with total Bitcoin sales of $2.039 billion from February 25-27, the selling pressure from investors has eased. In the past 24 hours, $135.20 million was withdrawn from the market, and assets under management are currently at a substantial $97.62 billion.
Despite the slowdown in BTC Spot ETFs selling, there have been significant liquidity inflows into Coinbase. Over the past week, inflows have totalled 719 million USDC. This large inflow, coupled with stagnant prices, suggests ongoing accumulation and potential anticipation of a rally.
Weekly Support is Crucial
As Bitcoin regains strength in the market, hinting at a potential rally, market sentiment could change. If this happens, the next significant support level would be at $74,000.
This support level has remained firm since January 2023 and has been a foundation for market rallies. A positive price reaction and upward trend from this level could signal a major Bitcoin rally. However, a breach of this support could indicate high bearish sentiment, resulting in further price declines.
The market currently appears well-positioned for an upswing, provided the bullish sentiment continues to dominate.
