Bitcoin’s rollercoaster ride continues as the leading cryptocurrency rebounds slightly after hitting a low of $76,606 during Tuesday’s early Asian trading hours. The recovery comes after a 3% decline on Monday, with BTC now hovering above $80,000 in the European session. However, market sentiment remains fragile as institutional investors continue to pull funds from Bitcoin ETFs, and macroeconomic uncertainty looms.
ETF Outflows Highlight Institutional Weakness
Bitcoin’s spot ETF market is showing clear signs of weakness, with another $278.4 million in outflows recorded on Monday, adding to last week’s $739.2 million exodus. If this trend continues, Bitcoin could face additional selling pressure.
At the same time, Mt. Gox has transferred another 11,833 BTC ($932 million) across wallets, sparking fears of a further price drop if these holdings are liquidated. Historically, large BTC movements to new wallets indicate a potential sell-off or redistribution, adding further bearish sentiment to the market.
US Macro Data Could Trigger More Volatility
Traders are bracing for heightened volatility ahead of two key US economic reports—the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday. These reports will be crucial in shaping the Federal Reserve’s monetary policy outlook and could significantly impact Bitcoin and other risk assets.
According to Bitfinex analysts, economic data is painting a mixed picture. While job growth remains strong, rising inflation and ongoing trade tensions with China, Mexico, and Canada have spooked investors. Donald Trump’s recent comments about “economic pain” have only added to market uncertainty, driving investors away from riskier assets like Bitcoin.
Traders Cautious as Bitcoin Tests Support Levels
Bitcoin is at a critical juncture. The Relative Strength Index (RSI) on the daily chart has bounced off 30 (oversold) to 36, suggesting fading bearish momentum. However, for a sustained recovery, BTC needs to reclaim its 50 RSI neutral level.
If Bitcoin falls below $78,258 (February 28 low), it could test the next major support at $73,072. However, signs of optimism remain, with Spanish bank BBVA now offering BTC and ETH trading and MicroStrategy raising $21 billion in capital to further strengthen its Bitcoin reserves.
With the macroeconomic landscape uncertain, all eyes are now on Wednesday’s CPI data. Will Bitcoin hold its ground above $80K, or are further declines on the horizon?
