1. Bitcoin has surpassed $70,000 for the first time since July, fueled by a decline in inflows from over-the-counter (OTC) desks.
2. U.S. spot ETFs are experiencing a significant influx of capital, which may be tied to the upcoming U.S. election and Donald Trump's favorable view on cryptocurrency.
3. Despite a recent pullback, bullish sentiment persists, suggesting that Bitcoin could achieve new highs if the inflow trend continues.
This week, Bitcoin price has finally surpassed the $70,000 mark for the first time since July. In the past week, BTC/USD climbed by 8%, though it has taken a slight pause today, currently trading down 1% at the time of writing.
A key factor in Bitcoin's recent surge is the decline in inflows at OTC desks, which currently hold 416,000 BTC, valued at around $30 billion. This is significantly higher than the average of less than 200,000 BTC during the first quarter, according to CryptoQuant data.
OTC desks are primarily utilized by large companies and affluent individuals seeking to execute trades privately, without impacting public crypto exchange records. This allows them to buy or sell substantial amounts of Bitcoin without affecting market prices.
The increased activity in OTC trading has contributed to Bitcoin's relatively stable price over the past seven months. With ample Bitcoin available at these desks, U.S. spot-listed exchange-traded funds (ETFs) can make purchases without influencing the spot price.
The amount of bitcoin going into OTC desks each day has dropped to the lowest this year. According to CryptoQuant, in October, OTC desks handled about 90,000 bitcoin daily, which is 52% less than in the first three quarters of the year. This could in part be responsible for the break of the $70k handle.
Recently, ETF flows have regained momentum as the U.S. election approaches, with markets positioning Donald Trump as the pro-crypto candidate, likely contributing to the recent price surge. Betting markets show Trump with a significant lead, although a recent Reuters/Ipsos poll indicates a tighter race with Kamala Harris holding a narrow advantage.
Since October 11, spot Bitcoin ETFs have attracted nearly $4 billion, with only one day registering outflows, according to Farside Investors. On Monday, U.S. spot ETFs saw inflows of $427.60 million, marking four consecutive days of positive movement. Just yesterday, total inflows reached $827 million. Although today's price dip may be a temporary setback, market participants remain optimistic that further inflows could lead to new highs.
Bitcoin (BTC/USD) is currently experiencing a brief pullback hovering on and around a key area at 72000. As the daily candle stands now, a close inside yesterday’s daily candle seems likely which would result in an inside bar bearish candlestick pattern.
This is obviously no guarantee of further downside as it appears that there is still a lot of bullish pressure. However a retest of the trendline break or the 70000 handle cannot be ruled out.
The confluence area between the 70000 and 68334 could be key for the bullish run to continue and may be worth keeping an eye open.
Immediate resistance rests at 73777 which is the current ATH with 75000 the next area of interest.
Conversely, support rests at 70000, 68334 before the 65876 handle becomes the area of focus.
Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
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