Opportunity for altcoins? Bitcoin dominance is reduced as ETFs register million-dollar outflows.
The price of Bitcoin fell 2.37% on Thursday, reaching $95,550, amid inflationary pressures and a stronger-than-expected US labor market. Meanwhile, altcoins are taking advantage of the decline of the king of cryptocurrencies, whose dominance fell to 60.05%. The economic context shows a strong dollar and a resurgence of inflation, which could weaken bitcoin.
In the short term, Bitcoin faces resistance at $98,200 (EMA50) and support at $93,600 (EMA100) / Tradingview
Inflation and strong dollar: The catalysts for the fall of bitcoin
The monthly Producer Price Index (PPI) exceeded expectations, registering an increase of 0.4%, which reinforces inflationary concerns. In addition, initial jobless claims fell to 213,000, indicating a resilient labor market. These data strengthen the dollar and reduce expectations of rate cuts by the Federal Reserve (Fed), putting downward pressure on bitcoin and other risk assets.
ETFs in the red: Net outflows of $500 million
According to data from Coinglass, Bitcoin ETFs have registered net outflows of almost $500 million since last Monday. This negative flow reflects investor caution in the face of an uncertain macroeconomic environment and a rising dollar.
While Bitcoin struggles to maintain its ground, altcoins are gaining ground. Bitcoin's dominance has dropped to 60.05%, from an annual high of 61.03%, according to data from NewHedge. This suggests the arrival of a possible "altseason" in the short term, where alternative projects could attract greater attention and capital.
On-chain indicators: Neutrality in the short term
On-chain data from CheckonChain shows that Bitcoin is in a neutral zone. The MVRV-Z is at -0.01, while the SHT-SOPR and STH-MVRV are also indicating neutrality. The annualized Futures Funding Rate of 8.25% suggests a “cold” market, which could anticipate a range breakout in the coming weeks.
Technical Outlook: Where is Bitcoin headed?
In the short term, Bitcoin faces resistance at $98,200 (EMA50) and support at $93,600 (EMA100). A bullish breakout could lead the price to test $106,200, while a drop below $93,600 could extend losses towards $84,400 (EMA200).
Although Bitcoin is facing pressures in the short term, its medium- and long-term bullish trend remains intact. Investors are on the lookout for new catalysts, such as inflation data and Fed decisions, which could define the direction of the market in the coming weeks.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Please do your research before making any investment decisions.
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