Highlights:
- Bitcoin has today failed at the $68,267 resistance
- Underlying bullish sentiment is strong despite failure at key resistance
- A rally through the $68,267 resistance could see Bitcoin rally to over $70k
Bitcoin is in a minor correction today, mirroring the prevailing price action across the market. In the last 24 hours, Bitcoin has dropped by 2.10% to trade at its current price of $66,784.65.
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Despite the correction, Bitcoin trading volumes remain high, standing at $37.62 billion up by 46.89% in the past 24 hours. It is an indicator that despite the correction, investor interest in Bitcoin remains high as investors expect major price movements in the short term.
Technical Analysis – Bitcoin Price in a Correction After Failing at Key Resistance
From the charts, Bitcoin is turning bearish after failing at the multi-month $68,267 resistance. However, for bears to take full control, Bitcoin would need to push through the $65,877 support. In such a case, Bitcoin could easily drop to a low of $63,968 in the short term.
On the flipside, if bulls regain momentum and push Bitcoin through the $68,267 resistance and close above it, it would signal an end to the ongoing multi-month consolidation between the $68,267 resistance and $55,719 support. In such a scenario, the key level to watch would be the $71,353 resistance. A rally through it could see Bitcoin rally to a high of $75k, or higher, in the short term.
Of the two scenarios, the odds are higher that bulls could pull a surprise rally and push Bitcoin through the $68,267 resistance and put it on course for a rally to $71,353. There are several factors that make the case for a Bitcoin rally in the short term.
Bitcoin ETF Inflows on the Rise
One of them is the rising inflows into Bitcoin ETFs. The ETFs had their best day on October 14 since June. Bitcoin ETF inflows recorded inflows of $555.86 million. In the lead was Fidelity, with inflows of $239.25 million. BlackRock’s ETF, which usually leads the way in inflows was third in the inflows data, recording an inflow of $79.51 million.
This surprise surge in the price of Bitcoin is an indicator that institutional money is currently flowing into Bitcoin, and the same could be reflected in the price of Bitcoin over time. Such a surge in institutional flow into Bitcoin could create the impression that a bull rally is coming. T
his could trigger retail FOMO into Bitcoin in the short to medium term. Already Bitcoin has gone on to hit a high of $69k since this surprise increase in Bitcoin ETF inflows. It could be an indicator of things to come as money continues to flow into Bitcoin.
Bitcoin Increasingly Resilient to Political Risks
Another bullish factor for Bitcoin is the fact that the top cryptocurrency is increasingly resilient to political risks. Recently, Italy hiked Bitcoin capital gains taxes from 26% to 42%. While this could set a precedent for other countries to follow, the price of Bitcoin remains stable and has rallied higher since the announcement of the Italian taxes.
GM
🇮🇹 Italy to raise capital gain tax on #Bitcoin from 26% to 42%. pic.twitter.com/n3mMPBJdpx— Damicale Shilling (@Damicale_s) October 16, 2024
At the same time, a section of the US Federal Reserve has written a paper calling for either a tax or a total ban on Bitcoin. The price remains stable nonetheless. All this means that investors increasingly expect Bitcoin to do well regardless of what the political class does at this point.
This also strengthens the case for a parabolic price move for Bitcoin if Donald Trump wins the election in November. That’s because he has come out as being openly pro-Bitcoin.
Bitcoin Exchange Reserves Drop
Even more support for an upside breakout for Bitcoin is that exchange reserves are running low. This is an indicator that a majority of Bitcoin holders hold their coins in cold storage and expect the price to go well going forward. All this points to a scenario where Bitcoin could be headed higher in the short to medium term.
#Bitcoin pic.twitter.com/WZoCa9rX32
— Stan Milc (@stanmilc) October 17, 2024
Bitcoin Price Could Still Test Higher Prices Despite Correction
Overall, despite the minor Bitcoin correction intra-day, Bitcoin still has a higher chance of a rally to $70k and higher. There are simply more bullish factors for Bitcoin than there are bearish factors at this point.
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