Bitcoin has been cautiously recovering for the past week. The price received a boost from a mix of milder signals from the Federal Reserve and shifting inflows into Bitcoin exchange-traded funds (ETFs). But despite the upswing, many analysts doubt whether this recovery is enough to truly break the downtrend.
Fed Signals and ETF Flows Keep Bitcoin Afloat #
The strongest push came from the Federal Reserve this week. Multiple policy makers suddenly sounded much more relaxed about future interest rate cuts, causing the probability of a cut in December to surge from 30% to 85%. This immediately created more room for risky assets, just as bitcoin was trading at its lowest level in six months.
On the institutional side, it was a turbulent week. CoinShares reported €1.7 billion in outflows from crypto investment products in a single week. Nearly two-thirds of that came from bitcoin funds, with one day standing out where BlackRock’s IBIT lost more than €430 million. Mid-week, however, that picture reversed when spot BTC ETFs recorded over €205 million in new inflows in one day. Fidelity captured €93 million of that, showing that major players remain active despite the correction.
Also notable: Strategy bought more than 8,000 BTC on the dip, while long-term holders were selling en masse. On-chain data indicates that around 800,000 BTC have moved from old wallets in recent weeks. This contrast clearly shows how divided the market currently is.
According to Unocoin CEO Sathvik Vishwanath, “renewed buying interest, better macro prospects and institutional inflows” are currently providing support, but he warns that bitcoin is now very sensitive to economic data and rate expectations. One negative macro surprise could easily set the market in motion again.
End of the Downtrend? #
Looking at the chart, we see that bitcoin found solid support around the $85,000 level. This area coincided with an important technical level. From that point, the price managed to rally towards $91,000, giving the market some breathing room.
However, this doesn’t automatically mean the downtrend is over. For a truly convincing turnaround, bitcoin must first break through the zone between $91,000 and $94,700, and then stay above the $100,000 mark for an extended period. Only then can we speak of a structural uptrend instead of a temporary bounce.
On the downside, the $85,000 level remains the most important point to watch. If bitcoin were to close below that on a daily basis, the price could start moving back towards the $75,000 to $78,000 range.