Bitcoin Ends Losing Streak: US Economic Optimism Fuels Recovery, Eyes on Inflation Data

Bitcoin Ends Four-Day Losing Streak

On Thursday, August 29, BTC advanced by 0.60%, reversing a 0.71% loss from the previous session, closing at $59,439. Significantly, BTC ended its four-session losing streak as the broader market rose by 0.20% to a total market cap of $2.043 trillion.

US Economic Indicators Fuel BTC Rally

Better-than-expected US labor market and GDP data boosted BTC demand. The US economy grew by 3.0% in Q2 2024, up from a first estimate of 2.8%. Additionally, initial jobless claims slipped from 233k in the week ending August 17 to 231k in the week ending August 24, easing fears of a US hard economic landing.

Thursday’s economic indicators bolstered bets on a soft US landing.

BTC Retreats from $61,000 Following NVIDIA’s Decline

On Thursday, NVIDIA (NVDA) extended its losses from Wednesday as investors reacted further to its Q2 2024 earnings report. NVDA ended Thursday down 6.38%, following a 2.10% loss on Wednesday.

Late in the session, BTC tracked movements in NVDA and the Nasdaq Composite Index, which ended the session down 0.23%.

US BTC-Spot ETF Market Flows Reflect the NVIDIA Effect

On Wednesday, August 28, the US BTC-spot ETF market reported total net outflows ($105.3 million) for the second consecutive session. The US BTC-spot ETF market eyed a third day of outflows on Thursday as NVIDIA dragged the Nasdaq into negative territory.

According to Farside Investors:

• On Thursday, Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $31.1 million.
• Grayscale Bitcoin Trust (GBTC) had net outflows of $22.7 million.
• Bitwise Bitcoin ETF (BITB) and Valkyrie Bitcoin Fund (BRRR) reported net outflows of $8.1 million and $1.7 million, respectively.
• ARK 21Shares Bitcoin ETF (ARKB) bucked the trend, with net inflows of $5.3 million.

Excluding inflow and outflow data for iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market recorded net outflows of $58.3 million. The prospect of a third successive day of net outflows pressured BTC ahead of Friday’s looming US Personal Income and Outlays Report.

Key Reports to Influence BTC Price Trends

On Friday, August 30, the highly anticipated US Personal Income and Outlays Report could influence BTC-spot ETF and BTC demand.

Economists forecast the US Core PCE Price Index to increase by 2.7% year-on-year in July, up from 2.6% in June.

Higher-than-expected inflation figures could reduce bets on multiple 2024 Fed rate cuts. A more hawkish Fed rate path could raise borrowing costs, possibly affecting demand for riskier assets, including BTC.

Personal income and spending figures will also be crucial. Downward personal income and spending trends could signal a softer inflation outlook, possibly countering the effects of higher inflation on Fed rate cut bets.

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 hovered below the 50-day and 200-day EMAs, indicating bearish price trends.

A break above the 200-day EMA and the $60,365 resistance level would support a move toward the 50-day EMA. Furthermore, a breakout from the 50-day EMA could give the bulls a run at the $64,000 resistance level.

The US Personal Income and Outlays Report, sentiment toward the Fed rate path, and BTC-spot ETF market flow trends require consideration.

Conversely, a drop below $57,500 could signal a fall toward $55,000. A fall through $55,000 may bring the $52,884 support level into play.

With a 45.30 14-day RSI reading, BTC could drop below $55,000 before entering oversold territory.

Ethereum Analysis

ETH hovered below the 50-day and 200-day EMAs, affirming bearish price signals.

An ETH breakout from the $2,664 resistance level would support a move toward $2,800. A return to $2,800 could give the bulls a run at the 50-day EMA.

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

Conversely, an ETH drop below the $2,403 support level may give the bears a run at the $2,124 support level.

The 14-period Daily RSI reading, 40.17, suggests an ETH break below the $2,403 support level before entering oversold territory.