BTC Price Analysis: Bitcoin ETFs Invest $1.1B Amid Middle-East Crisis: Here’s What to Expect

Bitcoin Price Analysis:

Bitcoin price opened trading at $60,800 level on Wednesday, Oct 2, as escalating crisis in the Middle-East triggered an 8.5% correction in the last 72-hours. Behind-the-scenes, US-based spot Bitcoin ETFs have entered 8-day buying spree since the Fed rate cut on Sept 18.

As geopolitical crisis triggers intense market volatility, can BTC hold the $60,000 support in the short-term?

Why is Bitcoin Price Down ?

After closing Sept 2024 strongly, Bitcoin price has experienced intense downward volatility this week. Escalating geo-political crisis in the Middle-East has sparked major correction across global risk assets.

Following the Fed rate cut on Sept 18, Bitcoin price instantly raced into a 12% rally to a monthly peaks above $66,700. But that rally was truncated on Sept 30 as the middle east crisis escalated.

While major mega stocks tumbled, BTC price has also took a dive this week, as speculative traders rapidly liquidated their positions in response the rising geopolitical risks.

In the past 24 hours, crypto market liquidations totaled $525.57 million, affecting 154,975 traders. The largest single liquidation order, valued at $12.66 million, occurred on Binance’s BTCUSDT trading pair.

On Oct 1, BTC price fell as low as $60,107 reflecting a 9.5% decline from last month’s peak of $66,448 recorded on Sept 27.

At the time of writing on Oct 2, BTC price has rebounded 2.28% to reclaim the $61,450 level as buyers swooped in to offer bullish support, after US Fed Chief, Jerome Powel hinted further rate cuts ahead.

Market data shows that, a large chunk of BTC’s current buying pressure is from US-based Bitcoin ETFs.

Bitcoin ETFs Enter 8-Day Buying Spree after Fed Rate Cut

Despite rowing economic uncertainty, low-interest rate environment, and Bitcoin’s safe-haven qualities have seen BTC continue to attract willing  buyers.

Amid cascading market liquidations this week, there has been constant BTC demand among the 11 approved US spot Bitcoin ETFs.

The Cryptonary chart below tracks the daily net-flows and volumes traded by the 11 US-approved Bitcoin ETFs.

The chart above shows that Bitcoin ETFs held a total of 941,030 BTC as of September 20. However, over the course of eight consecutive days of net inflows, they have since acquired an additional 17,830 BTC. This brings their cumulative holdings to 958,860 BTC as of Wednesday, October 2.

Valued at the current price of $64,455 per coin, the ETFs have spent approximately $1.1 billion on BTC during this period, amid growing economic and geopolitical uncertainty. This highlights Bitcoin’s appeal as a potential “safe-haven” asset, especially in times of heightened risk.

When demand for an asset rises during periods of economic instability, it often suggests investor sentiment is shifting toward assets perceived as more secure or resistant to macroeconomic pressures. Bitcoin, with its decentralized nature and finite supply, is increasingly being viewed as a store of value, similar to gold.

This trend could further strengthen Bitcoin’s standing in the financial markets as a hedge against inflation and global uncertainty, in the months ahead.

Bitcoin Price Forecast: Bulls Must Hold $60k Support

While social sentiment remains bearish due to ongoing geopolitical fears (FUD), Bitcoin continues to find demand from large investors seeking safe-haven assets. The current low-interest-rate regime further enhances this demand, supporting the likelihood that Bitcoin will hold above the critical $60,000 support level in the short term.

IntoTheBlock’s IOMAP chart below, highlights two key resistance levels could limit Bitcoin’s upward prospects in the short-term.

The first is around $62,000 to $63,000, where 896,970 addresses holding 318,290 BTC are “Out of the Money,” indicating potential heavy selling pressure in this range.

A second, more significant resistance is near $65,000, which might prevent Bitcoin from rallying further, given the growing market FUD.

On the downside, losing the $60,000 support could lead to cascading corrections, as it is a key psychological and technical level.

Should this level break, BTC could fall to the next critical support near $55,000, where the chart suggests stronger buyer interest, providing a potential floor for the cryptocurrency.

Therefore, bulls must defend $60,000 to prevent a steep sell-off and maintain upward momentum