Key Points
- BlackRock’s IBIT fund saw $317 million inflows on Oct. 23 as Bitcoin tested a crucial support level at $65,000.
- The broader cryptocurrency market fell by 1.45% due to concerns over the US Presidential Election and Federal Reserve’s rate trajectory.
On October 23, BlackRock’s IBIT fund investors capitalized on a more than 3% decline in Bitcoin, contributing significant inflows to the fund. This was as the cryptocurrency tested a crucial support level at $65,000.
Bitcoin experienced a significant downward trend on the same day, with a 3.3% slide to close at $66,649. This was a stark contrast to the 0.12% gain in the previous session. The cryptocurrency managed to find support at a session low of $65,161 before bouncing back above the $66,000 level.
The Impact of the US Presidential Election and Market Sentiment
This decline was mirrored in the broader cryptocurrency market, which saw a 1.45% drop to a total market capitalization of $2.242 trillion. This could be attributed to shifting sentiment driven by concerns over the upcoming US Presidential Election and the Federal Reserve’s rate trajectory.
Risk assets, including Bitcoin, faced selling pressure as investors grew wary of tightening monetary policy. The Nasdaq Composite Index fell by 1.60% as 10-year US Treasury yields surged to 4.26%, the highest since July. This signaled strength in the US economy and challenged expectations for multiple Fed rate cuts in Q4 2024.
As the US Presidential Election nears, uncertainty is adding further strain on investor sentiment. Recent polls indicate Vice President Kamala Harris leading former President Donald Trump by a narrow 1.7-point margin. Despite Harris’ lead, betting platform Polymarket gives Trump a higher chance of victory.
Recovery Driven by Spot Bitcoin ETFs
Despite the macroeconomic uncertainties, Bitcoin rebounded from the $65,000 support level. This was driven by renewed inflows into spot Bitcoin ETFs, particularly BlackRock’s IBIT. On Oct. 23, the 12 spot Bitcoin ETFs recorded net inflows of $192.31 million, with BlackRock’s IBIT contributing the lion’s share of $317.47 million.
Grayscale’s Bitcoin Minit Trust also contributed to the positive sentiment, recording $4.71 million in inflows. However, other ETF products, including ARKB, BITB, and VanEck, saw collective outflows of $129.8 million, reflecting a more cautious stance from some market participants.
Bitcoin’s Technical Outlook
Despite a price dip, Bitcoin remains above key technical levels, including the 50-day and 200-day exponential moving averages. This reinforces bullish signals. A potential breakout above the $69,000 resistance level could pave the way for a move toward the psychological $70,000 mark.
However, a drop below $66,500 could reignite bearish momentum, bringing the critical $65,000 support level back into focus. A further decline below $65,000 may open the door for a deeper correction.
With a 14-day Relative Strength Index reading of 60, Bitcoin has the potential to reach $70,000 before approaching overbought conditions. At the time of report, Bitcoin (BTC) was up 0.5%, exchanging hands at $67,345.
