The Bitcoin price has decreased 2.3% so far on Friday, and has fallen through the ascending trendline of the last 18 days. Is this a short-term fakeout, or is this the beginning of the feared descent to the $70,000 level?
Crypto market sentiment is still dominated by fear. The contagion from the traditional market, such as Thursday’s third of a percent drop in the S&P 500, and a 0.5% decrease in the Nasdaq, is working its way through to crypto. Bitcoin is down 2.5% on Friday so far, and the price has lost the recent local uptrend on the short-trend time frame.
Ninth straight day of net inflow for ETFs
This downward pressure on the Bitcoin price is in the face of a ninth straight day of net inflows for the U.S. Spot Bitcoin ETFs, which do appear to point to much better sentiment, at least among the clients of Blackrock et al.
Strategy buys another chunk of Bitcoin
Michael Saylor’s Strategy announced the purchase of a decent chunk of Bitcoin on Monday, adding another 6911 BTC, which takes the company’s holdings over 500,000 BTC, which equates to 2.41% of the entire 21 million Bitcoin supply.
Gamestop to follow the Strategy playbook
Gamestop, the largest retailer for gaming on Xbox and PlayStation, has recently announced that it will follow the Strategy playbook, and buy Bitcoin. For a company that is arguably dying, using its large cash position, and a private convertible senior notes offering with which to buy Bitcoin, may end up saving Gamestop. So far, the market hasn’t taken well to the news, and Gamestop shares are down more than 22% since Thursday’s open.
$BTC tags the bottom of its channel
Source: TradingView
Looking at the 4-hour chart for Bitcoin, and redrawing the ascending wedge, and making it a channel, it can be seen that Friday’s descent so far has only tagged the bottom of the channel, rather than breaking down through the ascending wedge. Is this perhaps an attempt to make things look better? Possibly, but thus far, at least, the channel is holding, and the short-time frame Stochastic RSIs are suggesting that a bounce may be coming.
If the channel does not hold, and given that it does have the characteristics of a bear flag, the price could come down once more to the $80,000 horizontal support level.
U.S. Stock market is key for Bitcoin price
Source: TradingView
If one looks at the stock market for clues as to where Bitcoin goes from here, the S&P 500 is probably key. Looking at the more macro view of the 2-week chart, it can be seen that the current ‘Trump tariffs’ crisis is already far more impactful than the Japanese carry trade crash back in July 2024.
Whereas the 2-week candle was bought right up inside the ascending channel back then, the current-day downturn has witnessed a candle opening well below the channel. That said, the strong support at $5,600 is holding, and a bounce could now take place from here.
Bitcoin will very much depend on positive price action in the U.S. stock market if it is to rise into its final top at some time towards the back end of 2025, and end a typical bull cycle.
Will this cycle be any different to those in the past? The jury is still out on this.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.