Bitcoin (BTC) bounced back to the $60,000 mark on Monday following a nearly 6% drop that saw it close below an important technical threshold. Last week, spot exchange-traded funds (ETFs) experienced net outflows amounting to $1.79 billion, the highest since late February, primarily due to significant selling by institutional investors. However, improved risk sentiment arose as the US and Iran agreed to stop recent hostilities and restart discussions concerning the Strait of Hormuz, providing a boost for Bitcoin’s gradual recovery.
Iran and US agree to halt attacks and resume talks
The US and Iran have reportedly reached an agreement to cease recent attacks in the Gulf and engage in discussions regarding the Strait of Hormuz friction.
This development seems to have positively influenced market sentiment, sparking hope that the temporary peace could persist. After several days of retaliatory strikes, a slight easing of geopolitical tensions can create a favorable environment for risk assets, allowing Bitcoin to reclaim $60,000 after last week’s steep correction.
That said, uncertainty remains a major factor, and traders need to be cautious. Should negotiations break down or if military tensions escalate again, it could dampen risk appetite and trigger another dip for Bitcoin.
Institutional investor sales limit BTC
Last week, institutional interest in Bitcoin appeared lackluster. According to SoSoValue data, spot BTC ETFs faced outflows of $1.7 billion, marking the highest weekly outflow since February. Additionally, it was the seventh straight week of outflows, setting a record since the launch of the BTC ETF.
Looking at the larger view, June’s ETF outflows reached $4.06 billion, indicating a second consecutive month of losses and the highest monthly outflow since Bitcoin ETFs began. This trend suggests weak institutional demand, which isn’t providing any buffer to the drop in Bitcoin prices. If this trend continues, we might see Bitcoin facing more declines.
Bitcoin Price Prediction: BTC Ends Below Major Support Zones
Bitcoin experienced a 5.9% correction last week, closing below its 200-week simple moving average (SMA) of around $62,643. It even dipped to a year-to-date low of $58,115 within the same week. As of Monday, there’s been a slight rebound after testing an uptrend line connecting various lows since January 2023.
If Bitcoin holds the support of this uptrend line near $58,000, it may extend its recovery toward the 200-week SMA at $62,643.
However, momentum indicators on the weekly chart raise concerns. The Relative Strength Index (RSI) is trending downward, with Monday’s reading at 33, nearing the oversold zone.
Additionally, the moving average convergence divergence (MACD) shifted to a bearish crossover on June 22, and this bearish signal remains, reinforcing a negative outlook.
If Bitcoin closes below the uptrend line at around $58,000 weekly, that could lead to deeper losses, potentially reaching the next support at $55,777.
On the daily chart, Bitcoin appears to maintain a bearish trend with the price below its 50-day, 100-day, and 200-day exponential moving averages (EMAs) of $66,969, $70,590, and $76,515, respectively.
The MACD on the daily chart hovers around zero with slightly negative readings. Meanwhile, the RSI is slightly above the oversold zone at 33, indicating that while bearish momentum is fading, it doesn’t yet signal a firm recovery.
Resistance seems to form around a horizontal line near $64,004, just before the 50-day EMA at $66,969 and the 100-day EMA at $70,590. These levels collectively restrict upward movement and continue to bolster the broader downward trend. Further resistance lies at the 200-day EMA of $76,515, with the previous level at $84,410 needing to be cleared for a medium-term bullish shift. The absence of immediate support leaves the pair vulnerable to further declines if selling pressure continues.
