- A bearish ‘death cross’ has formed on the Bitcoin chart.
- The launch of BTC-ETF has increased the risk of heightened volatility over the weekend.
- Outflows from Grayscale’s ETHE have paused.
The formation of a ‘death cross’ on the Bitcoin chart signals a potential new wave of sell-offs, despite the current rebound. This was highlighted by YouHodler’s risk manager, Sergey Gorev, as reported by The Block.
This signal occurs when the 50 DMA crosses below the 200 DMA.
Valentin Fournier from BRN maintains a cautious outlook on Bitcoin’s prospects. He recommends using the pullback to gradually increase positions due to the ‘room for growth before returning to the lower range.’
‘Open interest is decreasing more than the price drop. This indicates a decline in investor confidence and interest as volatility remains high. Weekend trading volumes were also lower, suggesting a lack of strong support for sell-offs,’ the expert noted.
In his view, volatility will not ease in August and September, leading to Bitcoin fluctuations between $49,000 and $69,000.
Elections and the Fed
David Lowant, head of research at FalconX, stated that the digital gold price could exit its current range due to changes in the monetary policy of the Fed and the US elections.
The expert recalled forecasts of a rate cut in September by 25-50 basis points, which, in his opinion, will increase interest in risky assets. Regarding the presidential race, he noted market uncertainty due to Kamala Harris’s less favorable position amid her close ratings with competitor Donald Trump.
Lowant further explained that for a sustainable recovery of altcoins, improvements in narratives and liquidity trends are needed, as well as the removal of potential selling pressure from early investors.
‘As FDV approaches pre-bull market levels, it may be time to pay closer attention to this segment,’ the expert emphasized.
ETF Impact
According to Kaiko, the launch of spot Bitcoin ETFs has concentrated liquidity during stock exchange trading periods, creating conditions for sharp price swings over the weekend during market stresses.
Analysts noted that during the recent sell-off, quotes changed by 14% between the opening of US trading on Monday and the close on Friday. They estimate that similar volatility was observed during the banking crisis in spring 2023.
Since the approval of BTC-ETF, the total inflow into products has reached $17.3 billion.
In total, BTC-ETP holds 5.02% of the available supply of the first cryptocurrency.
ETH-ETF
On August 12, the segment of spot Ethereum-ETF recorded zero changes in Grayscale’s ETHE for the first time since trading began. In comparison, GBTC took nearly four months before it saw its first day without fund outflows.
In previous trading days, investors withdrew $2.3 billion from the product. This led to net total outflows from ETH-ETF of $400 million, contributing to Ethereum’s weakness in the early days of trading instruments.
Before the ETF launch, assets in ETHE amounted to $8.6 billion. As of August 12, the figure fell by 40% to $5.08 billion.
From August 5 to 9, inflows into spot Ethereum-ETF totaled $104.8 million. For the first time since the approval of the instruments, the trend turned positive.
Earlier, the NYSE approached the SEC with a proposal to amend rules allowing it to list and provide trading options based on spot Ethereum-ETF from Bitwise and Grayscale.