Bitcoin (BTC), the leading cryptocurrency, is witnessing a positive shift in its market dynamics. A significant momentum indicator has turned favorable, drawing in excess of $2.1 billion in spot exchange-traded fund (ETF) weekly net inflows. This development could pave the way for Bitcoin to reach unprecedented price levels.
Is a New Bitcoin All-Time High on the Horizon?
The possibility of Bitcoin achieving a new all-time high (ATH) price is being bolstered by the moving average convergence divergence (MACD) histogram turning positive on the weekly chart. This is a pivotal moment, considering it’s the first occurrence since April 2024.
For those unfamiliar with the MACD histogram, it’s an essential momentum indicator that traders use to forecast future price movements of assets. The MACD helps identify momentum shifts, with positive values indicating an uptick in momentum, while negative values suggest a downturn.
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The MACD is derived by subtracting the 26-week moving average of Bitcoin from its 12-week average. Additionally, a signal line is created by averaging the MACD over nine weeks, with the difference displayed as a histogram. The height of this histogram signifies the strength of the trend, aiding in spotting potential buy or sell opportunities in the market.
In the Bitcoin context, the recent positive MACD histogram reflects increasing buying interest. It highlights that Bitcoin’s short-term price trend is gaining strength compared to its longer-term trend, hinting at potential upward movement surpassing its ATH of $73,737 in March 2024.
Supportive of this bullish momentum are macroeconomic factors, such as the US Federal Reserve’s decision to reduce key interest rates to spur business spending. Crypto analysts are optimistic that further rate cuts will provide Bitcoin with the necessary boost to rally in the fourth quarter of 2024.
Spot BTC ETFs Witness $2.1 Billion in Weekly Net Inflows
Another bullish indicator for Bitcoin is the resurgence of substantial weekly inflows into US-based spot BTC ETFs. Data from SoSoValue reveals that for the week ending October 18, spot BTC ETFs experienced net inflows of $2.13 billion. This marks the most significant weekly net inflow since $2.6 billion in March 2024, when Bitcoin achieved a new ATH of over $73,000.
As of October 18, the cumulative net inflow of US spot BTC ETFs is $20.94 billion, with total net assets amounting to $66 billion, representing nearly 4.9% of Bitcoin’s total market capitalization. Since the US Securities and Exchange Commission (SEC) approved these ETFs earlier this year, they have attracted considerable interest from institutional investors.
Notably, financial giant Morgan Stanley recently disclosed holding $272 million in BTC ETFs, accounting for about 2% of their total assets under management. This underscores growing institutional confidence in Bitcoin’s potential.
Despite these positive developments, the retail sector remains cautious. This is reflected in the declining search volumes for Bitcoin-related keywords on Google, indicating hesitancy among retail investors due to Bitcoin’s perceived volatility. Currently, Bitcoin is trading at $68,048, down 1.2% over the past 24 hours.
In conclusion, while Bitcoin’s momentum indicators and ETF inflows present a bullish outlook, the broader market sentiment and macroeconomic factors will play crucial roles in determining its future trajectory.
