FX168 Financial News Agency (Asia Pacific) reported that the analysis of CryptoQuant, a well-known on-chain institution, showed that Bitcoin has been in a bearish phase since August 27. Gold continues to set new historical highs, while Bitcoin is "deeply decoupled" from gold and is currently more than 20% lower than its historical high a few months ago. Bitcoin's market value to real value ratio (MVRV) is below its 365-day moving average, indicating that prices may adjust further.
In the current risk-averse environment, investors seem to prefer traditional safe-haven assets such as gold rather than Bitcoin.
According to CryptoQuant, the correlation between Bitcoin and gold has dropped significantly recently, with gold prices recently hitting new highs above $2,500 per ounce, while Bitcoin prices have been falling and are now more than 20% below their all-time highs above $73,000 set in March.
Source: CryptoQuant
Investors have been buying gold and selling bitcoin, while the U.S. stock market has also struggled, with the S&P 500 down 3.6% since August 30.
Read more: Prepare for a weaker dollar as China continues to secretly build up its gold reserves
The CryptoQuant Bull-Bear Market Cycle Indicator has been in a bear market phase since August 27, when Bitcoin was trading at $62,000.
The MVRV ratio has also been below its 365-day moving average since August 26, suggesting that prices could pull back further, CryptoQuant said. The MVRV ratio falling below the moving average was a precursor to the 36% drop in May 2021.
Source: CryptoQuant
CryptoQuant mentioned that the decline in Bitcoin prices was also accompanied by a decline in the U.S. dollar index, another indicator of broader risk aversion and uncertainty.
The U.S. presidential televised debate on Wednesday (September 11) attracted investor interest. Although former President and Republican presidential candidate Donald Trump has been courting the support of cryptocurrency voters, he did not mention the cryptocurrency market, which affected the demand for Bitcoin.
Subsequently, US economic data drove Bitcoin price fluctuations, and the market had bet on a 50 basis point rate cut by the Federal Reserve in September.
The annual inflation rate of the US Consumer Price Index (CPI) in August fell from 2.9% in July to 2.5% in August, supporting expectations of a rate cut by the Federal Reserve in September. However, the core inflation rate in August was still 3.2%, dispelling the hope of a 50 basis point rate cut by the Federal Reserve.
Bitcoin responded to this, hitting an intraday low of $55,593 before recovering. Stable core inflation data dampened investor sentiment for the Fed's aggressive policy shift.
According to the Fed Watch tool of the Chicago Mercantile Exchange (CME), the probability of a 50 basis point rate cut by the Federal Reserve in September fell from 34.0% on September 10 to 15.0% on September 11.
On Wednesday, the US Bitcoin spot ETF saw its first outflow of funds in three trading days, reflecting sentiment towards US core inflation data and falling expectations of a 50 basis point rate cut by the Federal Reserve.
According to Farside Investors data, ARK 21Shares Bitcoin Spot ETF (ARKB) had a net outflow of $54 million, Grayscale Bitcoin Spot ETF (GBTC) had a net outflow of $4.6 million, while Fidelity Bitcoin Spot ETF (FBTC) reported a net inflow of $12.6 million.
Excluding the flow of funds from BlackRock Bitcoin Spot ETF (IBIT), US Bitcoin Spot ETFs had a net outflow of $43.9 million, resulting in a loss for Bitcoin. US Bitcoin Spot ETF fund flows affect Bitcoin demand, which in turn affects Bitcoin price trends.
Later Thursday, initial jobless claims and producer prices may further affect people's views on the Fed's interest rate path. Lower producer prices and higher unemployment claims may rekindle hopes of a 50 basis point rate cut by the Federal Reserve, potentially pushing Bitcoin to $60,000.
However, if initial unemployment claims unexpectedly surge above 250,000, recession concerns may resurface, adversely affecting Bitcoin demand.
Bitcoin Technical Analysis
FXEmpire analyst Bob Mason said Bitcoin is hovering below the 50-day and 200-day EMAs, confirming a bearish price signal.
A break above $58,000 could allow bulls to gain momentum on the 200-day and 50-day EMAs. Moreover, a break above the 50-day EMA could support a move towards the $60,365 resistance level.
Conversely, a break below $55,000 could bring the $52,884 support level into play.
With a 14-day RSI reading of 48.23, Bitcoin could fall below $55,000 and then enter the oversold zone.
Source: FXEmpire
Bitcoin is nearing the $100,000 mark, driven by growing optimism around Trump’s crypto-friendly policies and rising institutional interest. The crypto market is surging, with altcoins also gaining strength, signaling a bullish trend across the sector.
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AnaisMichael Saylor plans to present a Bitcoin investment strategy to Microsoft’s board ahead of a key vote on 10 December. The proposal, backed by shareholder activism, suggests Microsoft consider Bitcoin as a potential investment, citing MicroStrategy's success with the asset.
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