ETF Inflows Surging

Bitcoin prices are a little softer again today as the futures market continues to consolidate below the $83,385 level. The push higher though mid-August has stalled in recent weeks, however, there is reason for bulls to be hopeful with institutional demand seen rising firmly. Bitcoin ETF inflows have ballooned recently with funds adding just shy of $1 billion in net inflows this week, now up to more than $3 billion over the last fortnight.

Bullish Positioning

Inflows have now risen for three consecutive weeks, suggesting that bullish sentiment is firming up. Indeed, more interesting still is that BTC ETF inflows have surged, despite overall ETF volume declining. This suggests that the accumulation of BTC exposure is more likely linked to longer term positioning rather than short term trading moves. This tallies with the current price action we’re seeing where BTC looks to be in a period of consolidation and accumulation following the spike higher in mid-August, setting up for a fresh push higher. Indeed, the market has held its ground despite the uptick in Fed tightening expectations on the back of Friday’s better-than-forecast NFP data.

US Inflation

Looking ahead this week, Friday’s US CPI data will be the headline event to watch and could provide the catalyst for a fresh breakout higher in BTC if inflation undershoots forecasts, leading September Fed tightening expectations lower. On the other hand, if inflation is seen holding at 3.4% or rising again, this could fuel an unwinding of BTC longs as US rate expectations push higher.

Technical Views

BTC

The rally in Bitcoin has stalled for now ahead of the $83,385 level, with momentum studies cooling and turning lower again. However, while price holds above $74,270, focus is on a continuation higher and a fresh breakout towards the $94,730 level medium-term.