Bitcoin rally backed by institutional inflows, eyes $72,800 resistance
Bitcoin's price recovery is underpinned by diverse buying from ETFs and long-term holders, though heavy US Treasury issuance threatens to drain market liquidity.
Bitcoin's recent rally is drawing support from a broadening base of buyers, indicating the price recovery is backed by strong hands rather than fleeting speculation.
US-listed spot bitcoin funds have recorded over $700 million in inflows across five consecutive trading days, marking the longest positive streak since May, according to SoSoValue. "This renewed institutional interest stands in contrast to the severe selling pressure and record redemptions experienced earlier in the summer, notably $7.5 billion between mid-May and June," Tagus Capital said in an email.
On-chain data confirms this accumulation trend among wallets holding coins for at least six months. "Large Bitcoin whales have been building up their positions over the last two months, while medium-sized wallets have been selling. This divergence in behaviour could be a ‘constructive signal’ for BTC in the medium term, according to CryptoQuant [data]," Alex Kuptsikevich, chief market analyst at FxPro, said in an email.
Options markets are also showing a bullish tilt, with recent large purchases of bull call spreads targeting $72,000 by the end of the month. "Overall, the market appears increasingly balanced, with long-term conviction providing support while speculative participation remains contained," blockchain analytics firm Glassnode noted.
From a technical standpoint, bitcoin has accelerated after breaking above its 50-day simple moving average. Traders are now watching the 100-day average at $70,173 as immediate resistance. A decisive break above the 200-day average, positioned just above $72,800, would confirm the end of the bear market that began last October.
Despite the constructive fundamental and technical backdrop, significant macroeconomic headwinds remain. The US Treasury is set to drain substantial liquidity from the financial system just as risk assets attempt to rally. "Treasury bill settlements are expected to result in net new issuance of $56 billion, followed by an additional $37 billion on Thursday and a smaller coupon settlement of $13 billion on Friday. Treasury bill issuance will likely remain heavy until Labor Day, creating a headwind for risk assets as we move through the summer," Michael Kramer, founder of Mott Capital Management, wrote in a blog post.
