As Bitcoin (BTC) approaches a pivotal weekly close, traders are holding their breath, hoping for a breakthrough that could signal the end of a seven-month downtrend. With the cryptocurrency currently hovering around $67,777, many eyes are on the price action as it attempts to crack through a long-standing resistance level that has been in place since March’s all-time high of $73,800.
A Stubborn Downtrend
For over half a year, Bitcoin has been trapped within a downward-sloping channel, characterized by repeated failures to re-enter the price discovery phase. Despite multiple attempts to regain momentum, the BTC/USD pair has remained rangebound, leaving many traders questioning the market’s direction. However, there’s a sense of cautious optimism in the air, as recent price movements suggest that the landscape may finally be changing.
Prominent trader and analyst Rekt Capital recently shared insights on Twitter, indicating that Bitcoin is again testing the upper edge of the downtrending channel, a critical resistance point currently located at approximately $68,000. “Bitcoin has experienced a rejection from the top of the Downtrending Channel just like in the past,” he remarked, referencing similar scenarios in the past. Yet, this time, a weekly close beyond the channel top is within sight, as buyers exert pressure, leaving bears with limited maneuverability.
Signs of a Breakout
Notably, Bitcoin’s performance on lower timeframes provides additional reasons for optimism. According to Daan Crypto Trades, another well-regarded analyst, daily closes are already occurring outside the downtrend channel, marking a significant shift in the market’s dynamics. “With the recent move, it has finally broken out of the channel it traded in for most of 2024,” he stated, further highlighting that BTC has cleared both its 200-day simple moving average (SMA) and exponential moving average (EMA) cloud, a feat that has posed challenges since the summer.
The analysis shows a short to mid-term upward trend, suggesting that bulls are gaining momentum. A decisive break above the critical $68,000 resistance could pave the way for a new bullish phase in Bitcoin’s price action.
Institutional Demand Soars
Adding to the bullish sentiment, institutional demand for Bitcoin continues to rise, influencing market dynamics even amid modest price shifts. As reported by Cointelegraph, recent days have witnessed a surge in investor capital inflows, with Bitcoin investment vehicles globally seeing net yearly inflows of 360,000 BTC. This trend is on track to surpass the Grayscale-led record of 373,000 BTC set in 2020.
Also Read: Morgan Stanley Invests $272M In Bitcoin ETFs As Institutional Inflows Surge $473M in A Day
The total net flows of U.S. spot Bitcoin exchange-traded funds (ETFs) have also reached a record $20 billion, with total assets soaring to an all-time high of $65 billion. Eric Balchunas, a senior ETF analyst at Bloomberg, pointed out that it took gold ETFs about five years to achieve similar numbers, underscoring the remarkable growth in Bitcoin’s institutional adoption.
As Bitcoin faces a critical weekly close, the combination of technical signals and rising institutional demand could signal a shift in market sentiment. Traders remain hopeful that a breakthrough above the $68,000 resistance level may initiate a new bullish chapter for Bitcoin, ending its prolonged downtrend. Whether the bulls can maintain their momentum remains to be seen, but the upcoming weekly close is sure to be a pivotal moment for Bitcoin’s future trajectory.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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