Bitcoin saw a short burst a few hours ago, bouncing off the $112k support. It peaked at its highest value in the last four days but is seeing a slight pullback.
BTC is opened Friday at $112,471 and saw a small upward move before retracing to $111,658, the lowest since Jul 10. However, it recovered, surging to a high of $117,421.
The change in trajectory started when the market saw a massive shift in fundamentals. It is worth noting that the apex coin was grappling with the negative PPI release last week. The drop worsened following reports from the US labor market. Rising jobless claims suggest heightened fears of increasing inflation, diminishing the chances of a rate cut in September.
However, the Federal Reserve chairman recently hinted at a higher chance of a rate cut. He noted that several factors are causing a shift in the institution toward a cut next month.
The reaction trailing the announcement was nothing short of excitement as investors who were afraid of rising inflation breathed a sigh of relief. It also offered the prospect of further bullish action across the crypto market.
Nonetheless, the crypto market is not the only bullish market after the positive statements—large-cap stocks like NVIDIA and Apple Inc. gained over 1% in the last 24 hours. Tesla is the top gainer in the top 10, with over 6% increase.
Institutional Selling is Rising
Reports from Glassnode noted that there is a rise in selling pressure from institutions. US Bitcoin spot ETFs saw an outflow of 4.2k BTC on Aug 21, coinciding with the price decline. It is worth noting that many firms are stacking up ETFs instead of buying the coin; the drop in investment funds indicates that they are dumping.
While the recent hike suggests the situation has improved, current price action indicates that the uptrend may be short-lived.
Other data from Glassnode shows that the apex coin is still at risk of a massive drop. Using the UTXO Realized Price Distribution (URPD) reveals a new support and Bitcoin’s next possible target. The metric shows that investors have accumulated over 1.15 million BTC between $104k and $105k.
Nonetheless, it is worth noting that the previous cost basis for short-term investors was $112k. The apex coin lost the mark more than once in the last two days. The buyers tried defending the mark. However, the asset dropped lower on Friday, registering a deeper low than on Thursday. This may suggest less demand concentration around this level.
Bitcoin Will Drop to $105k
The bulls need to maintain trading above $116k or risk further declines. The dwindling demand concentration around $112k will see Bitcoin retrace lower in the coming days. Based on Glassnode’s data, its next price target may be $104k.
Nonetheless, the 1-day points to a new level with notable demand concentration. The fibonacci retracement level shows the apex coin trading close to the 38% mark. However, it trades below it, suggesting that it is yet to decisively flip this critical mark.
Previous price movement indicates that Bitcoin will drop to the 61% fib level if it loses momentum. It may return to grappling with notable selling pressure at $112k, and breaking this mark will see it drop to the 78% level at $109k.
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