ETF Inflows Soar, Exchange Reserves Fall – New Rally Ahead?
Bitcoin Below $100K Ahead of the NFP Release. Indecision Rules the Short-Term
Recently, Bitcoin has been trading below $100K and facing difficulties with all its attempts to move above this threshold. It even dropped as low as $91,500 as new Trump tariffs on Canada, Mexico, and China imports sparked fear of a trade war.
Cryptocurrencies across the board fell on Monday when the new tariffs were announced but most of them quickly bounced and erased a big chunk of the losses. Now, there may be additional gains on the table, as a popular metric shows that we may see surges in Bitcoin’s price. According to data from the on-chain analytics platform CryptoQuant, exchange reserves are dropping fast, which usually means that investors are sending their coins to their personal wallets in anticipation of a price increase.
When exchange inflows grow, it usually indicates that investors and traders are moving their coins to the exchange to sell them. If they don’t want to sell them, the coins are stored safely away, in personal wallets, which seems to be the case now.
On the other hand, spot Bitcoin Exchange Traded Funds (ETF) inflows are swelling up, which usually means that a price increase will follow. U.S. spot Bitcoin ETFs saw cumulated inflows of roughly $5 billion in January, which would put the annualized number just below $60 billion. This would substantially surpass last year’s $35.2 billion. Of course, this calculation assumes that inflows are steady at $5 billion each month, which will probably not be the case but ‘never say never’.
Chart Analysis – BTC/USD
The latest rejection at $90,700 support shows that bearish pressure is present but it is not enough to break a significant level and to reverse the uptrend. However, Bitcoin is currently trading at $97,300, below the $100K major level and below the 50-day Moving Average.
The candles are small and with long wicks, which suggests indecision. We can also see a bearish bias in the short term and a lack of conviction from the buyers. The Relative Strength Index (RSI) is trading below its 50 level, which adds to the bearish bias.
The overall market sentiment seems to favour Bitcoin and cryptocurrencies in general but in the short-term, we may see the price sliding lower, without excluding a drop into the $90,700 area. Don’t forget that today the always-important NFP will be released, showing a picture of the U.S. jobs market, which will have an impact on crypto markets as well.
