$110k or $116k. Where is Bitcoin Headed?

Bitcoin sank even lower on Tuesday, dropping to a low of $111,571 before rebounding. It opened the session at $112,741 and is trading higher following its rebound. 

The apex coin is trading above $113k, signifying a slight increase in buying pressure. Reading from the 4-hour chart suggests that its latest increase is part of the broader price movement over the last 24 hours. Nonetheless, the asset is showing signs of breaking out.

Bitcoin continues to grapple with several negative trends onchain. Recent reports indicate that it experienced weak spot volume last week, resulting in relatively low price movement. The coin has grappled with the weak state of the spot market for more than two weeks. Current price action suggests that the trend is ongoing.

However, exchange-traded funds saw notable inflows but slowed down. Two weeks ago, ETFs registered a capital influx of $2.34 billion, which is more than 60% higher than the $886 million recorded last week. Away from the noted investment funds, futures and options signal sell pressure, accompanied by rising volume.

Readings from these indicators on what transpired last week, coupled with the bearish start to the current week, cast a dark foreboding about how prices will perform over the next five days. 

However, the impending address by Jerome Powell is raising optimism among investors, who anticipate a positive outcome. If this happens, it will no doubt result in notable increases for the apex coin. 

Traders are gearing up for this possibility, as they have moved 52.2k BTC from exchanges, almost twice the inflow of 27.4k. The increased outflow has caused a notable decline in exchange reserves, a buy signal if the spot volume rises. 

Where is Bitcoin Headed?

While the outlined data from the previous cast a dark foreboding on Bitcoin’s action in the coming days, the 1-day chart holds a slim hope of notable increases.

A review of previous price movements reveals a trend following a significant decline, such as the one on Monday. The most recent is the trading action that followed after the apex coin retraced by almost 4% on Aug 29. It consolidated for three days, then resumed its uptrend.

Before the highlighted decline, Bitcoin experienced a three-day retracement followed by three days of pullback. Additionally, trading action between Aug 18 and Aug 21 shows bears a similar tale. If this trend continues, BTC is expected to see a notable buyback within the next 24 hours. 

A driving catalyst for this buyback could be Jerome Powell’s speech. A recent analysis suggests a higher likelihood of a positive outcome and highlights the fireworks that may follow. It noted that investors may expect a 3-5% hike on Tuesday.

Drawing parallels from what happened on Aug 22 provides insight into how high the apex coin may go. Bitcoin surged by almost 4%, erasing the previous losses. A repeat of this event will see the asset break above $116k on Tuesday.

However, the uptrend may be short-lived, as the sentiment across the crypto market is largely bearish. The fear and greed index is at 40, its lowest in the last twenty days. It indicates possible exhaustion among the bulls, which may hinder the pursuit of further increases as the impending euphoria wanes.

Nonetheless, there remains a slim chance of a hawkish outcome to the upcoming event. Prices will sink even lower if that happens. 

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