Bitcoin price crashed to the important 50-day moving average as it continued facing major headwinds. Spot BTC ETF outflows are soaring, while the Coinbase Premium Index has remained in the red for weeks, a sign that American demand is falling. BTC was trading at $76,745, down sharply from this month’s high of over $82k.
Bitcoin price drops as ETF outflows surge
There are signs that demand for Bitcoin in the United States has tumbled this month. Data compiled by SoSoValue shows that the momentum these funds started the month with has largely disappeared today.
All spot Bitcoin ETFs have now suffered outflows in the last three consecutive days. They lost $331 million on Tuesday after losing $648 million in the previous month. In total, these funds shed over $1.2 billion in the last three trading days.
Most notably, they are on track to end the month in the red unless something changes. They have now lost $727 million this month, a notable figure since they added over $1.6 billion in the first six days of the month.
Coinbase Premium Bitcoin Index has dropped
The Coinbase Premium Bitcoin Index, a closely-watched number has remained in the red in the past few weeks. This is an important figure that looks at the overall demand for the coin in the United States, where Coinbase is the most popular exchange among retail and institutional clients.
Ideally, when there is robust demand, the price of Bitcoin tends to be higher on Coinbase than other exchanges. Today, the price remains slightly higher than in Binance, which is the most popular platform internationally.
The same trend is happening in the futures market, where the open interest has continued falling in the past few months. This open interest has dropped from over $60 billion a few weeks ago to $55 billion today.
There are a few reasons why this is happening. First, crude oil prices have remained at an elevated level this month, with Brent and the West Texas Intermediate rising to over $105. The average gasoline price in the US has jumped to $4.5, and the surge may continue in the foreseeable future.
These numbers mean that consumer inflation will continue rising this year. A report released last week showed that the headline consumer inflation rose to 3.8% in April. The producer price index rose to 6%, the highest level in years. As a result, there is fear that the Federal Reserve will maintain higher interest rates for longer.
Second, there are signs that investors are capitulating and moving to the better-performing stock market where the AI boom is accelerating. Indeed, top stock market ETFs like VOO and IVV have added billions of dollars this year.
Third, the bond market has continued to come under pressure, with the 30-year yields jumping to over 5%. As such, there are signs that investors will start moving to the bond market in the near future.
BTC price prediction: Technical analysis
BTC price chart | Source: TradingView
Technicals also explain why the BTC price has crashed in the past few days. As the chart above shows, the coin started forming a rising wedge pattern on March 23rd. This pattern is made up of two uptrending trendlines, with a bearish breakout happening when they near their confluence.
The coin has made a bearish breakout and is now hovering at the 50-day moving average. A drop below this price will confirm the bearish breakout and point to more downside in the near term. If this happens, the next key level to watch will be at $70,000.
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