Bitcoin Rebounds Above $70K as ETF Selling Subsides—Key Level to Watch

Key Takeaways

  • Bitcoin reclaimed the key $70,000 level Monday after last week’s retracement that was driven by net outflows in spot Bitcoin ETFs.
  • Analysts cited easing of ETF outflows, bullish technicals, and favorable macro fundamentals for Bitcoin’s rebound.
  • Bitcoin’s price found support near the key 38.2% Fibonacci retracement level around $60,000, with the cryptocurrency’s record close now in focus.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, rebounded more than 5% Monday to reclaim the key $70,000 level, following a cool-off in sentiment last week that was driven by a net outflow in spot bitcoin exchange-traded funds (ETFs).

Although there was no clear catalyst behind bitcoin’s jump, Galaxy Digital’s Alex Thorn attributed the renewed buying interest to a pause in bitcoin ETF selling and improving technicals, adding that such retracements were typical in bitcoin bull market cycles.

“The record GBTC outflows over the last two weeks, likely caused by Genesis and Gemini bankruptcy liquidations, contributed to weakness in spot prices, but several technical indicators pointed to seller exhaustion,” Thorn was quoted by CNBC as saying.

Grayscale’s Bitcoin Trust (GBTC), which has significantly higher fees than its rivals, led outflows last week, with investors withdrawing $1.9 billion from the fund, leading to a net outflow of roughly $900 million across all bitcoin ETFs for the week ending March 22.

Swan Bitcoin analyst Sam Callahan put bitcoin’s rebound down to improving macro fundamentals after the Federal Reserve reaffirmed three quarter-percentage point cuts by the end of the year at its interest rate policy meeting last week.

“Such actions will enhance liquidity conditions, acting as a positive catalyst for asset prices. Bitcoin functions as a barometer of liquidity conditions and responded favorably to the Fed’s messaging that monetary policy will likely ease in the near future,” Callahan noted, according to CNBC.

Sentiment may have also been boosted by data from crypto derivatives analytics site CoinGlass showing that bitcoin short position liquidations over the past 24 hours were lower than average, indicating that investors weren’t using leverage to bet on further price falls.

After consolidating over the past few weeks, bitcoin’s price found buying support at the key 38.2% Fibonacci retracement level, just above the closely watched $60,000 area. The region also sits in close proximity to the legacy cryptocurrency’s prior November 2021 record high of $69,000, indicating the price may be readying for another move higher.

A convincing breakout above the current record high at $73.835.57 would likely see a continuation of the bullish momentum, while a reversal at this key level could open the door to a deeper retracement towards the 50-day moving average.

Bitcoin was trading at about $70,300 at around 9:30 p.m. ET Monday.

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As of the date this article was written, the author does not own any of the above securities.

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