(Kitco News) – Bitcoin (BTC) price consolidated above $61,000 in early trading on Wednesday after recovering from Monday’s sub-$59,000 dip, with positive inflows into spot BTC exchange-traded funds (ETFs) providing a boost in momentum.
BTC/USD Chart by TradingView
Data provided by Farside Investors shows that U.S.-listed spot BTC ETFs saw net inflows of $31 million on Tuesday, snapping a seven-day streak of outflows that saw nearly $1.135 billion exit the funds.
The Monday pullback has largely been attributed to the announcement that the Mt. Gox Bitcoins would soon be distributed to creditors, which sparked concerns that a massive token dump was imminent. Those fears have since diminished, and many analysts were quick to note that a similar reaction was seen on multiple occasions when announcements regarding the distribution of Mt. Gox Bitcoin were made.
"As is often observed in markets, the headline announcing the distribution of Mt. Gox inventory marked the local bottom of this multi-week BTC sell-off,” said Matthew Kaye, Head of Operations and Strategy at Intuition Systems, in a note shared with Kitco Crypto. “Altcoins found their floor ahead of BTC and have outperformed since, with the meme sector once again proving to be crypto’s top-performing sector.”
“While the Mt. Gox overhang might initially appear bearish, the truth is that the claims have been trading for a decade, and the majority of selling is likely already priced in,” he added. “Moreover, significantly more selling has occurred over the past few weeks, likely by those interested in buying back lower.”
“This means that whatever Mt. Gox and German government selling remains is simply providing entry liquidity,” Kaye concluded. “The time for being irrationally bearish is ending as the market finally puts the Gox saga behind it. It’s best to never assume that crypto is dead, and dips are generally opportunities for buying.”
Analysts across the cryptosphere agreed with Kaye, with most predicting that Bitcoin will soon run higher based on technical analysis and key indicators.
Market analyst Ali Martinez posted the following chart highlighting the Relative Strength Index (RSI) for Bitcoin, showing that previous sell-offs into oversold territory have been followed by double-digit percentage increases.
“Imagine having one indicator that signals the perfect time to buy the #Bitcoin dip... Keep it simple, folks, and study the daily $BTC RSI,” Martinez tweeted.
Titan of Crypto elaborated further on Martinez’s observation, noting that the previous two times a similar divergence occurred “Bitcoin went berserk mode.”
#Bitcoin About to surge. ?
A hidden bullish divergence is forming for #BTC on the daily RSI.
In addition, RSI tagged the oversold territory.
Last two times it happened Bitcoin went berserk mode. pic.twitter.com/ObbZsxGmWS— Titan of Crypto (@Washigorira) June 26, 2024
Market analyst Moustache pointed out that past instances where the Crypto Fear & Greed Index signaled “Fear” while Bitcoin retested the previous cycle’s all-time high provided a strong bullish signal for future price performance.
#Bitcoin
The Crypto Fear & Greed Index signals "Fear" while $BTC retests its ATH from 2021.
Just like in 2017...just like in 2020.
I think there is hardly a more bullish sign than this. pic.twitter.com/hV4hJu9uWY— ???????ⓗ? ? (@el_crypto_prof) June 26, 2024
Captain Faibik offered a more measured analysis of the price action, noting, “For the past 4 Months, $BTC has been moving within the green box between the 60k and 70k Support and Resistance levels.”
“Until #Bitcoin breaks either of these levels, no definitive conclusions can be made, so it’s better to wait and see. (Because trading is a game of patience.)” he said. “If Bitcoin Successfully breaks the 70k Resistance level, we could see a 30-40% bullish wave. In a Bearish scenario, if Bitcoin breaks the 60k horizontal support and the weekly EMA21 levels, it could touch the 50k level in the coming weeks.”
“One more thing: as long as Bitcoin moves within the green box, it remains in a safe territory, and the Bitcoin bulls are in complete control,” he concluded.
And John Glover, Chief Investment Officer of Ledn, also warned about the possibility of a pullback to the mid-$50,000 range before Bitcoin resumes its rally higher.
“Wave 5 (orange line in chart) continues to develop as anticipated, with the potential for wave (ii) of 5 to fully re-trace wave (i), which could lead to a retest of $56.5k before the next rally,” Glover said in a note shared with Kitco Crypto.
“I’ve been asked if there is a possibility that Wave 3 has not yet been completed, as can be seen in the yellow line in the chart,” he added. “That is a possibility, although it is not my preferred wave count.”
“If that does turn out to be the case, the ultimate Wave 5 target will be circa $110k to $110k instead of $85k to $95k,” he concluded. “I will review the price action once we hit $80k+ to determine whether the yellow count is more likely.”
At the time of writing, Bitcoin trades at $61,552, an increase of 0.19% on the 24-hour chart.
