BTC Price Forecast: ETF Inflows Provide Support as Middle East Tensions Rise

Cryptonews Economy Clara Montgomery October 8, 2024

BTC Price Forecast: ETF Inflows Provide Support as Middle East Tensions Rise

On October 7, Bitcoin fell by 0.89% to $62,254 amid increasing Middle Eastern tensions and rising crude oil prices, which unsettled risk assets. Positive sentiment from U.S. economic performance boosted ETF inflows but concerns about Federal Reserve monetary policy persisted. BTC’s trading patterns suggest potential resistance levels at $64,000 and $66,520, alongside critical support at $60,365.

On October 7, Bitcoin (BTC) experienced a decline of 0.89%, reversing its previous session’s 1.19% gain, and settled at $62,254. The cryptocurrency reached a peak of $64,482 before retracing its gains, reflecting a general downturn within the cryptocurrency market, which dropped by 0.91%, resulting in an overall market capitalization of approximately $2.118 trillion. The ongoing tensions in the Middle East have continued to suppress demand for high-risk assets. Concurrently, West Texas Intermediate (WTI) crude oil prices surged above $77, reflecting heightened investor anxiety regarding potential disruptions in oil supply due to the conflict, with projections suggesting prices could escalate to $80. This rise in oil prices contributed to diminutions across U.S. equity markets and cryptocurrencies alike, with the Nasdaq Composite Index declining by 1.18% to end at 17,924. Moreover, investor sentiment surrounding future Federal Reserve monetary policy has significantly shaped BTC demand. The U.S. Jobs Report released on Friday had bolstered optimism around the possibility of the U.S. sidestepping a recession, which typically enhances appetite for riskier investments. However, the prospect of a less accommodating Fed rate approach negatively impacted market performance on Monday. The CME FedWatch Tool indicates a surge in the probability of the Fed maintaining current interest rates in November, rising from 2.6% on Friday to 12.7% by Monday. Last week, the likelihood of a 50-basis point cut in rates fell drastically from 53.3% (September 27) to 0% (October 4), signaling that a prolonged elevated Fed rate scenario could further dampen demand for speculative assets. Despite the prevailing uncertainties, positive sentiment towards the U.S. economy has revived interest in Bitcoin spot exchange-traded funds (ETFs). Farside Investors reported that, excluding iShares Bitcoin Trust (IBIT) flows, the U.S. Bitcoin spot ETF market recorded net inflows of $137.3 million, a significant increase from the previous day’s $25.6 million. These inflows could provide fresh support for BTC as trading resumes on Tuesday, with continued influx anticipated to elevate demand amid lingering conflict-related concerns and uncertainty regarding the Fed’s stance. Should the trend in U.S. BTC-spot ETF inflows persist, BTC could surpass the $65,000 mark. Investors need to remain vigilant due to potential shifts from Fed announcements and developments in the Middle East that could influence BTC price dynamics. A further escalation in conflict could lead to a flight to safety among investors, subsequently lowering BTC demand. Moreover, close monitoring of ETF inflows will be vital in gauging short-term BTC supply-demand patterns. Currently, BTC is trading above the 50-day and 200-day Exponential Moving Averages (EMAs), indicating bullish momentum. A breakthrough beyond the $64,000 resistance level, specifically Monday’s peak of $64,482, could enable bullish trends toward the September 27 high of $66,520. Achieving this target may provide a pathway to reach the $69,000 resistance level. Inversely, a fall below the 50-day EMA may shift focus to the $60,365 support level, while a breach of the 200-day EMA could lead prices down towards $55,000. With a relative strength index (RSI) reading of 53.04, BTC possesses the potential to rise to the $69,000 resistance threshold before facing overbought conditions. Ethereum (ETH), in contrast, is positioned below both the 50-day and 200-day EMAs, thus signaling bearish tendencies. An ETH price breakout above the 50-day EMA could facilitate movement towards the $2,664 resistance level, with further gains potentially pushing it toward the 200-day EMA and $3,000 milestone. Nevertheless, should ETH dip below the $2,403 support level, a decline towards $2,124 may ensue. The 14-day daily RSI reading of 45.70 indicates an ETH potential drop to the $2,124 support level before entering oversold territory.

The cryptocurrency market, particularly Bitcoin and Ethereum, is currently influenced by various macroeconomic factors, including geopolitical tensions, particularly in the Middle East, and Federal Reserve monetary policy expectations. Recent job reports have indicated a stronger U.S. economy, impacting investor sentiment and asset demand. Additionally, fluctuations in commodity prices, such as crude oil, have created turbulent market conditions, underscoring the increased volatility synonymous with cryptocurrencies. The introduction and performance of BTC-spot ETFs represent a crucial development for investors and traders, significantly influencing market dynamics. Understanding these elements is essential for investors navigating current market trends and anticipating potential price movements in digital assets.

In summary, Bitcoin’s recent price movements demonstrate sensitivity to both global economic factors and domestic monetary policy. The current decline of BTC, amidst rising crude oil prices and geopolitical tensions, highlights the risk aversion impacting investor behavior. However, sustained inflows into Bitcoin-spot ETFs present a counterbalancing force that may support BTC demand in the face of such challenges. Investors should remain attentive to upcoming economic indicators and political developments, as these will undoubtedly shape future pricing trends in the cryptocurrency landscape.

Original Source: www.fxempire.com