Institutional Demand for Bitcoin Remains Flat Amidst Market Uncertainty
The cryptocurrency market has been experiencing a period of uncertainty, with Bitcoin briefly losing a key support level ahead of the Bank of Japan’s interest rate decision. Despite this, institutional demand for Bitcoin has remained relatively flat, with a focus on the potential implications of the interest rate decision on the market.
Bitcoin ETFs Experience Outflows
According to data from SoSoValue, the 12 spot Bitcoin ETFs in the U.S. recorded $32 million net outflows on Thursday, Jan. 22. BlackRock’s IBIT led with $22.3 million of outflows, while Fidelity’s FBTC followed with $9.7 million. This marks the fourth consecutive day of outflows, totaling $1.6 billion, and pushing total outflows this month to $14.55 million.
- Bitcoin ETFs have hit a four-day outflow streak totaling $1.6 billion.
- BTC has lost the $90k support as investors reacted to macro pressures.
- Short-term technicals remain in favor of more downside.
These outflows were fueled by a climate of ‘extreme fear’ as investors braced for the Bank of Japan’s interest rate decision. Markets were on edge over a potential hold at 0.75%, a level not seen in three decades. High interest rates typically strengthen the Yen and dampen the appeal of risk assets, including cryptocurrencies like BTC.
Bitcoin Price Action
Bitcoin (BTC) fell to an intraday low of $88,557 after losing $90k on Thursday before managing to recoup some of the losses after the BoJ’s decision. Nevertheless, Bitcoin price remains at risk unless it can reclaim the psychological support at $90K. At press time, the bellwether was trading roughly 10% below the next key psychological resistance at $100k, a level it lost around mid-November last year.
Bitcoin price has dropped below a key ascending trendline support line on the daily chart — Jan. 23 | Source: crypto.news
On the daily chart, Bitcoin price action shows that it has dropped below an ascending trendline that had been acting as support since late November last year. Each time Bitcoin dropped below this level, bulls managed to stir it back to its previous trajectory. The loss of this critical floor now puts Bitcoin at risk of a deeper correction.
Technical Indicators
Bitcoin has also dropped below the 50-day simple moving average, suggesting that selling pressure has intensified and momentum is shifting in favor of the sellers. On top of this, the MACD indicator, which gauges trend strength and direction, showed that a bearish crossover was at play.
For now, it is likely that Bitcoin may continue its downtrend with bears potentially targeting a return to the mid-December low of $85,000. On the contrary, a decisive rebound back above $90k would invalidate the bearish forecast and position it for a potential recovery towards its January high of $97,538.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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