Bitcoin will stabilize at around $63,000 on Monday. The US Spot Bitcoin ETF experienced weekly outflows. The NYDIG report highlights that Bitcoin remains the best-performing asset this year, up 49.2% year-to-date.
Bitcoin (BTC) stabilized around $63,000 on Monday after finding support near key levels last week. Despite last week’s volatility, where BTC prices fell from a high of $65,618 to a low of $59,828, the NYDIG report shows that Bitcoin is up 49.2% year-to-date and remains the year’s best-performing asset, along with United Airlines. It makes one thing clear. Funds were outflowing from state (U.S.) physical Bitcoin exchange-traded funds (ETFs) on a weekly basis.
Demand for Bitcoin from institutional investors is expected to decline
Compared to last week, institutional investor inflows into BTC have decreased. From the last week of September to the first week of October, inflows to the U.S. Spot Bitcoin ETF fell from $1.1 billion in inflows to $262.8 million outflows, according to data from Coinglass. The ETF’s sharp decline suggests that institutional demand is declining.
Total Bitcoin Spot ETF Net Inflows Chart. Source: Coinglass
On Friday, the U.S. non-farm payrolls (NFP) for September was released, showing that 254,000 new non-farm jobs were created in September, far exceeding the market estimate of 140,000, and the unemployment rate was lower than before. It decreased slightly from 4.2% in the fiscal year to 4.1%. Cryptocurrency trading firm Capital QCP’s Friday report for August said that despite the previous month’s dismal results, the strong data reflects a robust labor market in the United States. “We believe recent favorable macro data supports our view of a long-awaited ‘uptober’ trend,” the report said. ” states.
Additionally, according to historical Bitcoin monthly returns, BTC delivered an overall positive return for traders in October, averaging 21.01%, hence the nickname “Uptober.” Coinglass’ historical Bitcoin monthly return chart flipped to green after surging above $63,000 on Monday. This could be a sign of optimism for Bitcoin.
Bitcoin monthly return (%) graph. Source: Coinglass
The New York Digital Investment Group (NYDIG) reported last week that Bitcoin remains the year’s best-performing asset, up 49.2% year-to-date.
Year-to-date return graphs for different types of assets. Source: NYDIG
Additionally, the report explains that the 90-day rolling correlation between Bitcoin and US stocks continued to rise during the third quarter, ending the quarter at 0.46. Although the correlation between Bitcoin and stocks has increased, recent levels remain low, suggesting that Bitcoin provides significant diversification for multi-asset portfolios. Considering Bitcoin’s long-term average 90-day rolling correlation is only 0.12, it would be a mistake to think of Bitcoin as a “leveraged US stock.”
Bitcoin correlation diagram. Source: NYDIG
The report also notes that the upcoming US election on November 5 will have a significant impact on market trends in the fourth quarter, and that if Trump wins, the cryptocurrency market can be expected to rise further. “We expect to see a change in the SEC chief, with Mr. Gensler being replaced by someone who is likely to be more pro-crypto. The fourth quarter is traditionally a bullish period for BTC. There are many possible triggers for history to rhyme,” the report said.
Technical analysis: BTC rebounds from $60,000 support level
Bitcoin prices fell back last week, finding support near the 200-day exponential moving average (EMA) of $60,000 on October 2nd. Over the next four days, the stock rose 3.5% and broke through the resistance level at $62,125. As of Monday, BTC has extended its recovery and is trading above $63,000.
If $62,125 holds as support, BTC could extend the rally and retest the $66,000 psychological level.
The Relative Strength Index (RSI) on the daily chart is hovering at 53, just above the neutral level of 50, indicating traders’ indecision. For Bitcoin to maintain its strength, the RSI needs to continue rising above the neutral level.
BTC/USDT daily chart
However, if the $62,125 level fails, BTC could decline to retest the 200-day EMA level at $60,000.
Frequently asked questions about Bitcoin, altcoins, and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization and is a virtual currency designed to function as money. This form of payment is not controlled by any particular person, group, or entity and eliminates the need for third parties to participate during financial transactions.
An altcoin is any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is these two cryptocurrencies that forks occur. If this is true, Litecoin would be the first altcoin to fork from the Bitcoin protocol and thus be an “improved” version of it.
A stablecoin is a cryptocurrency that is designed to have a stable price, and its value is backed by the reserves of the asset it represents. To achieve this, the value of a stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), and its supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who wish to trade and invest in cryptocurrencies. Also, since cryptocurrencies are generally volatile, stablecoins allow investors to store value.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the market capitalization of all cryptocurrencies combined. This clearly shows the interest in Bitcoin among investors. BTC’s dominance typically occurs around bull markets, where investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. Decreasing BTC dominance usually means investors are moving their capital and profits to altcoins in search of higher returns, which usually causes an explosive rally in altcoins.
