Bitcoin (BTC) Price Rebounds Above $66K as Spot Bitcoin ETFs See Renewed Inflows

On Oct. 23, investors in BlackRock's IBIT capitalized on Bitcoin's over 3% decline, contributing $317 million in inflows to the fund.

Bitcoin (BTC) price action faced selling pressure on Wednesday, sliding over 3% and testing a critical support level at $65,000 as investors reacted to shifting macroeconomic conditions.

After a 0.12% gain in the previous session, BTC encountered significant downward pressure on Wednesday, sliding 3.3% to close at $66,649. As Bitcoin approached the $65,000 level, buyer demand was tested, with the session low reaching $65,161 before the price managed to find support and climb back above the $66,000 mark.

The broader cryptocurrency market also experienced a slight decline, shedding 1.45% to reach a total market capitalization of $2.242 trillion.

This decline in cryptocurrency prices can be attributed to shifting sentiment driven by concerns over the upcoming US Presidential Election and the Federal Reserve’s rate trajectory.

As a risk asset, Bitcoin faced selling pressure on Wednesday as investors grew wary of tightening monetary policy. The Nasdaq Composite Index fell by 1.60% on the day, while 10-year US Treasury yields surged to 4.26%, marking the highest level since July and challenging expectations for multiple Fed rate cuts in Q4 2024.

Adding further strain to investor sentiment ahead of the US Presidential Election, recent polls indicate Vice President Kamala Harris leading former President Donald Trump by a narrow 1.7-point margin.

However, betting platform Polymarket gives Trump a higher chance of victory, with a 59.7% probability compared to Harris’ 40.4%. A Trump presidency is expected to bring inflationary pressures, potentially leading to a more hawkish Federal Reserve stance.

While this may dampen demand for riskier assets, including Bitcoin, Trump’s crypto-friendly policies could bolster longer-term demand for the digital asset.

Despite the macroeconomic uncertainties, Bitcoin rebounded from the $65,000 support level, driven by renewed inflows into spot Bitcoin ETFs, particularly BlackRock’s IBIT. This follows a previous day of outflows, which saw $79.1 million flow out of the fund amid concerns that Bitcoin’s rally might be losing momentum.

The 12 spot Bitcoin ETFs recorded net inflows of $192.31 million on Wednesday, with BlackRock’s IBIT contributing the lion’s share of $317.47 million. This marks the fourth time in six trading days that the fund has attracted over $300 million in inflows, bringing its total net inflows to over $23 billion as of Oct. 21.

Grayscale’s Bitcoin Minit Trust also contributed to the positive sentiment, recording $4.71 million in inflows, while other ETF products, including ARKB, BITB, and VanEck, saw collective outflows of $129.8 million, reflecting a more cautious stance from some market participants.

From a technical perspective, despite Wednesday’s price dip, Bitcoin remains above key technical levels, including the 50-day and 200-day exponential moving averages, reinforcing bullish signals.

A potential breakout above the $69,000 resistance level and the Oct. 21 high of $69,402 could pave the way for a move toward the psychological $70,000 mark. Should Bitcoin successfully breach $70,000, bulls may attempt to challenge the all-time high of $73,808.

However, a drop below $66,500 could reignite bearish momentum, bringing the critical $65,000 support level back into focus. A further decline below $65,000 may open the door for a deeper correction, with $64,000 as the next key support.

With a 14-day Relative Strength Index reading of 60, Bitcoin has the potential to reach $70,000 before approaching overbought conditions.

At press time Bitcoin (BTC) was up 0.5%, exchanging hands at $67,345.

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