Bitcoin (BTC) Drops Below $65K as Fed Signals Impact Spot ETF Demand

Bitcoin Gives Up the $65,000 Handle

On Monday, September 30, BTC slid by 3.46%, following a 0.38% loss from Sunday’s session, closing at $63,366. BTC tracked the broader crypto market, which fell by 3.21% to a total market cap of $2.181 trillion.

US BTC-spot ETF and the Seven-Day Winning Streak

On Monday, September 30, the US BTC-spot ETF market faces the prospect of net outflows for the first time since September 18. According to Farside Investors:

• ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $9.5 million on Monday.
• Bitwise Bitcoin (BITB) reported net outflows of $9.7 million.
• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $8.3 million.
• Grayscale Bitcoin Trust (GBTC) had zero net flows.

Excluding flow data for iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market reported net outflows of $10.9 million. Weak demand from the US BTC-spot ETF market impacted BTC price trends.

Fed Chair Powell Dampens BTC-spot ETF Demand

Fed Chair Powell likely tempered buyer demand for US BTC-spot ETFs, paring bets on a 50-basis point November Fed rate cut. Powell downplayed any need for urgency to cut interest rates, stating that the Fed remains data-dependent. The Fed Chair described the economy as strong and the labor market as solid.

According to the CME FedWatch Tool, the chances of a 50-basis point November Fed rate cut fell from 53.3% (September 27) to 38.0% (September 30).

Santiment Warns of Overly Bullish Sentiment

On Sunday, market intelligence platform Santiment commented on BTC price trends and the chances of a new all-time high, stating,

“If you’re awaiting Bitcoin’s new all-time high, it may need to wait until the crowd slows down their own expectations. There are currently 1.8 bullish posts toward BTC for every 1 bearish post. Markets historically always move the opposite direction of crowd’s expectations.”

On Monday, Santiment added,

“As we mentioned Friday, the crowd’s sentiment toward Bitcoin had been particularly bullish, indicating a high top probability for crypto markets. With Monday’s retrace, there are some expected panic sells. If the FOMO turns to FUD, the bull market should resume quickly.”

Market sentiment toward the US economy, the Fed rate path, geopolitics, and supply-demand trends remain crucial for BTC and the broader market.

US Economic Calendar and Its Impact on BTC

Looking ahead to October 1, US labor market data and FOMC Member commentary may influence BTC demand.

Weaker-than-expected JOLTs Job Openings could refuel bets on a 50-basis point November Fed rate cut, supporting a BTC return to $65,000. Conversely, a sharp pullback in job openings may reignite fears of a hard US landing, possibly sending BTC below $60,000.

Beyond the data, investors should track FOMC Member commentary. Insights into the Fed rate path would likely influence BTC demand.

Investors should remain alert, with upcoming US economic indicators, US BTC-spot ETF flows, and supple-demand trends likely to affect buyer demand for BTC and the broader market. Stay updated with our latest news and analysis to manage your BTC and crypto exposures.

Technical Analysis

Bitcoin Analysis

BTC hovers above the 50-day and 200-day EMAs, sending bullish price signals.

A breakout from the $64,000 resistance level would support a move toward the September 27 high of $66,520. Furthermore, a return to $66,520 could give the bulls a run at the $69,000 resistance level.

Investors should consider the US economic calendar, news from the Middle East, Mt. Gox chatter, and US BTC-spot ETF market flows.

Conversely, a break below the 50-day EMA may signal a drop toward the $60,365 support level.

With a 55.61 14-day RSI reading, BTC could climb to $67,500 before entering overbought territory.

Ethereum Analysis

ETH remains above the 50-day EMA while hovering below the 200-day EMA, confirming bullish near-term but bearish longer-term price trends.

An ETH breakout from the $2,664 resistance level could bring the $2,800 level into play. Furthermore, a climb to $2,800 may give the bulls a run at the $200-day EMA.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH break below the 50-day EMA could signal a fall toward the $2,403 support level.

The 14-period Daily RSI reading, 55.38, suggests an ETH break above the 200-day EMA before entering overbought territory.