BTC Bounces Off Lows

Bitcoin prices are trading tentatively in the green across early European trading on Tuesday. Following a breakdown lower last week which saw BTC futures crashing through support at 60695, the market swiftly reversed higher as demand kicked in at the lows of the move. It seems the dip in BTC was an attractive proposition for longer term holders with spot-Bitcoin ETFs seeing their largest single-day inflows on Friday at $378 million. 

Rising ETF Demand

Surging ETF inflows had been a big driver of the move higher in Bitcoin over Feb and early March. However, those flows were seen drying up over the last 8 weeks, leading to the stagnation and correction lower we saw. The hope for bulls now is that the pullback has attracted enough demand to fuel a fresh push higher on the back of the April halving event.

Call Demand Targeting $75k - $100k

There are further signs that bullish sentiment is creeping back into the market. The latest industry data shows a heavy rise in call options following the rally on Friday. QCP capital noted that it was seen strong demand for $75k and $100k call options while other brokers and platforms have noted a similar rise in OOTM options targeting firmly higher prices.

Fed in Focus

Looking ahead, the key factor for BTC will be the Fed. Friday’s jobs data will no doubt be welcomed by those looking for Fed easing, with both the headline NFP and wage growth undershooting forecasts and the unemployment rate ticking higher. If we see a fresh drop in inflation in coming readings, this should help weaken USD, putting the focus back on near-term Fed easing expectations and creating room for a breakout higher in crypto.

Technical Views

BTC

The breakdown in BTC found strong support into a test of channel lows. Price has now bounced back above 60695 and is testing resistance at 64540. With momentum studies turning higher again, focus is on a test of the channel highs and 69355 resistance next if bulls can sustain upside momentum here. 

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