Bitcoin Drops Amid Cautious Market; ETF Outflows Highlight Growing Investor Caution

BTC Drops Below $63,000 as Investors Turn Cautious

On Monday, August 26, BTC declined by 1.85% following a 0.02% loss from the previous session, closing at $62,903. BTC had milder losses than the broader market, which fell by 2.33% to a total market cap of $2.156 trillion.

US Economic Indicators Signal Resilient Economy

The Dallas Fed Manufacturing Index and durable goods orders calmed investor jitters about a US recession.

Durable goods orders increased by 9.9% in July, reversing a 6.9% decline from June, reflecting a significant rebound in manufacturing demand.

Additionally, the Dallas Fed Manufacturing Index increased from -17.5 in July to -9.7 in August, with higher wages testing investor fears of a deteriorating US labor market.

Could the data influence bets on a 50-basis point Fed rate cut?

The better-than-expected US data reduced investor expectations of aggressive Fed rate cuts. According to the CME FedWatch Tool, the chances of a 50-basis point September Fed rate cut fell from 36.0% on Friday, August 23, to 30.5% on Monday, August 26.

US BTC-spot ETF Market Flows Reflect Cautious Sentiment

On Monday, the US BTC-spot ETF market could end its seven-day net inflow streak. According to Farside Investors:

• Bitwise Bitcoin ETF (BITB) saw net outflows of $16.6 million.
• Fidelity Wise Origin Bitcoin Fund (FBTC) reported net outflows of $8.3 million.
• VanEck Bitcoin Trust (HODL) had net outflows of $7.2 million.

Excluding flow data for iShares Bitcoin Trust (IBIT) and Valkyrie Bitcoin Fund (BRRR), the US BTC-spot ETF market recorded net outflows of $21.5 million.

US Economic Calendar

US consumer confidence numbers, out on Tuesday, August 27, could influence the Fed rate path. Economists forecast the CB Consumer Confidence Index to fall from 100.3 in July to 100.1 in August.

A sharp fall in confidence and increasing concerns about the labor market may support bets on a 50-basis point September Fed rate cut to bolster the economy.

Weaker labor market conditions may dampen wage growth and consumer spending, possibly affecting the US economy. Fears of a US recession may impact demand for riskier assets, including BTC.

Investors traditionally invest in less volatile asset classes, including gold, during economic uncertainty. Gold advanced by 0.23% on Monday after rallying 1.11% on Friday.

Investors should remain alert amid possible changes to supply-demand trends. Stay updated with our latest news and analysis to manage exposure to BTC and the broader crypto market.

Technical Analysis

Bitcoin Analysis

BTC remained above the 50-day and 200-day EMAs, affirming bullish price signals.

A break above the $64,000 resistance level would support a move toward $65,000. A return to $65,000 could give the bulls a run at the $69,000 resistance level.

US consumer confidence, sentiment toward the Fed rate path, and BTC-spot ETF market flow trends require consideration.

Conversely, a break below the 50-day EMA could signal a drop to the $60,365 support level. A fall through the $60,365 support level would bring the 200-day EMA into play.

With a 54.95 14-Daily RSI reading, BTC may move to the $69,000 resistance level before entering overbought territory.

Ethereum Analysis

ETH hovered below the 50-day and 200-day EMAs, confirming the bearish price trend.

An ETH breakout from $2,800 could give the bulls a run at the 50-day EMA. Furthermore, a break above the 50-day EMA may support a move to the 200-day EMA and the $3,033 resistance level. However, selling pressure could increase at the $3,033 resistance level. The 200-day EMA is confluent with the resistance level.

US ETH-spot ETF market-related news also requires consideration.

Conversely, an ETH drop below the $2,664 support level could signal a fall through $2,500. A fall through $2,500 could give the bears a run at the $2,403 support level.

The 14-period Daily RSI reading, 46.07, indicates an ETH drop to the $2,403 support level before entering oversold territory.