Bitcoin May Be Heading For a Short-Term Relief. Here’s Why

Bitcoin resumed its downtrend on Tuesday after a notable uptrend over the weekend. It plummeted after breaking above $107k.

BTC has since been in decline, with a few brief upticks. One such instance occurred on Thursday, when it broke above $104k as investors expressed excitement over the US government reopening.

However, a recent outlook predicted the move, stating that the apex coin will break above $103k. It added that it will retrace after the euphoria dies off. Conclusively, it pointed out a possible retest of the $100k support and a new low.

Price action between Thursday and Friday was some of the bearish for Bitcoin this week. Following the slight uptick it had in the early hours. It soon retraced, dropping below $100k as predicted. It slipped to a low of $97,950.

In June, the asset dropped to a low of $98,240. Last week, it hit a low of $98,898. It registered a deeper low in the early hours of Friday. Continuing the previous day’s downtrend and slipping to a low of $94,500. On the weekly scale, the apex coin is down by almost 8%.

Following the series of downtrends and the recent low, most investors are uncertain about how prices will perform in the coming days, raising questions about whether the downtrend is over.

The chart indicates that the bulls have yet to stage a decisive buyback that could send the asset on a recovery. However, the reason for the dip may provide more insight into how prices will react.

Massive ETF Selloff

At the start of previous uptrends, exchange-traded funds experienced massive inflows, which sometimes preceded significant uptrends. However, these investment funds are the major reason for the recent price declines.

On Thursday, BTC ETFs shed a massive $870 million, their second-largest daily outflow. The largest happened in February when it lost over $1.13 billion, and the price reacted similarly as it currently is.

However, by tracking Bitcoin’s price in relation to how prices have reacted, a clear trend emerges that may dictate how prices will perform in the coming days. 

The event that followed, when ETFs shed over a billion, reveals that the apex coin may be gearing up for a significant move. The apex coin lost over 3% on Feb 26 when it registered its highest outflow. It had a larger decline the next day, losing 5%. Nonetheless, it is worth noting that it experienced a similar decline prior to the selloff.

Recent price actions closely resemble events in February, suggesting that prices may follow a similar trend this time. Identical to the previous event, the asset is experiencing a greater decline than when the sale occurred.

However, what followed was a period of price consolidation. Prices surged afterward, and the apex coin erased almost all of its losses. If the trend continues, Bitcoin is likely to see notable increases next week. 

How High Will Bitcoin Go?

Per the case study, Bitcoin broke above the bollinger’s middle band on the 1-day chart. A repeat will see the asset recover, edging closer to the SMA at $106k. 

While there’s a chance it breaks above the band, the stay above the metric will be short-lived. The asset will retrace afterward. 

A previous outlook noted that there is a CME gap at $91k; the next decline may fill it.

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