Bitcoin Price Prediction as BTC ETF Inflows Jump Despite Strategy Sales

Key Insights

• Bitcoin price recovered but stalled at $63,800.
• Spot Bitcoin ETFs added over $262 million in inflows on Monday.
• The ADX has dropped, a sign that the rally is losing momentum.

Bitcoin price rally stalled at $63,800 on Tuesday despite some positive news in the industry. BTC has jumped by 10% from its lowest level this year, helped by rising ETF inflows and the Crypto Fear and Greed Index.

Bitcoin ETF Inflows are Rising Despite Strategy Sale

BTC’s price has been in a slow uptrend over the past few weeks, supported by rising ETF inflows. Data shows that Bitcoin ETFs added over $224 million in assets on Friday, followed by $265 million. These inflows mean that the ETFs have now added over $192 million in inflows this month.

The flows are also notable because the funds had experienced outflows in the previous ten consecutive days. Notably, they are occurring at a time when stock market volatility has jumped, with top stocks like Micron and Nvidia entering a bear market. While no evidence exists, that could be a sign that investors are selling their stock ETFs and rotating to Bitcoin.

The ongoing inflows are also happening after Michael Saylor’s Strategy announced a big Bitcoin sale on Monday. It sold 3,588 coins last week, raising over $200 million. This is just the beginning as the company plans to raise over $1.5 billion through Bitcoin sales to boost its balance sheet.

The goal is to maintain an adequate cash balance to cover its dividend payments to preferred stockholders. Its urgency to sell Bitcoin accelerated after stocks like STRC and STRK plunged from their par levels.

Strategy’s Bitcoin sales are important because it has been the most acquisitive in the past few years. As such, the selling may put pressure on more companies that hold Bitcoin to start dumping. This could be enormous as these firms hold over 1 million coins.

BTC is Rising as Crypto Fear and Greed Index Jumps

The ongoing Bitcoin rebound is happening after popular Crypto Fear and Greed Index continued its slow uptick. This index tumbled to the extreme fear zone of 15 as its retreat happened.

The Fear and Greed Index has now jumped to 30, and may hit the neutral stage in the near term. Bitcoin and other altcoins normally start rising when the index is in the extreme fear zone and then reverse when it moves to the extreme greed area.

BTC Price Faces Some Risks Ahead

In addition to Bitcoin treasury companies starting to sell their coins, BTC faces some major risks ahead. The first is that this rebound could be a dead-cat bounce, a situation in which an asset in freefall bounces back briefly before resuming the downtrend.

Also, there is a risk that the Federal Reserve will maintain a hawkish tone under Kevin Warsh. While energy and transport inflation is falling, there is a risk that service inflation will remain at an elevated level in the near term. The market is pricing in a rate hike later this year, which may affect risky assets.

Bitcoin Technical Analysis

There are signs that Bitcoin is losing momentum. For example, the Average Directional Index (ADX) has dropped to 28, from last month’s high of 45. A falling ADX is a sign that the trend is losing steam. Also, the coin has found substantial resistance at the 50-day moving average.

The coin also remains below the descending trendline, which connects the highest swings since May 11 this year. Therefore, the coin may resume its downtrend and retest the $60,000 support level.

On the flip side, a move above the key resistance level of $67,400 will point to further gains, potentially to $70,000.

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