Bitcoin Sinks Below $60K on US Government Transfers, ETF Outflows, and Bearish Signals

BTC Drops Below $60,000

On Wednesday, August 14, BTC slid by 3.14%, reversing a 2.10% rally from Tuesday to close at $58,752. The total crypto market cap declined by 2.24% to a total market cap of $2.042 trillion.

Oversupply Concerns Weigh on BTC

On Wednesday, BTC movements involving Mt. Gox and the US government impacted buyer demand for BTC.

According to Arkham Intelligence, 10,000 BTC (593.5 million) originating from the US government’s Silk Road haul moved to a Coinbase wallet on Wednesday. The transfer fueled speculation about a possible sale order that could adversely affect supply-demand trends. The US government currently holds 203,239 BTC (11.88 billion).

In July, the US government transferred $2 billion worth of BTC to two crypto wallets, impacting BTC and BTC-spot ETF demand.

Wallet activity increased this week, with Bitgo reportedly moving $2 billion worth of BTC originating from Mt. Gox on Tuesday, August 13. In July, Mt. Gox transferred 33,960 BTC ($2.25 billion) to Bitgo, a custodian working with Mt Gox’s trustees.

Mt. Gox is sitting on a 46,164 BTC ($2.70 billion) stockpile, waiting to repay creditors. BTC could face adverse price pressures if creditors flood crypto exchanges with BTC sell-orders.

BTC Transfers Impact US BTC-Spot ETF Flow Trends

On Wednesday, the US BTC-spot ETF market saw net outflows of $81.4 million, ending a two-day inflow streak.

According to Farside Investors:

• On Tuesday, Grayscale Bitcoin Trust (GBTC) reported net outflows of $56.9 million.
• Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $18.0 million.
• ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $6.8 million.
• Bitwise Bitcoin ETF (BITB) saw net outflows of $5.8 million.

However, iShares Bitcoin Trust (IBIT) and Franklin Bitcoin ETF (EZBC) reported total net inflows of $2.7 million and $3.4 million, respectively.

Softer US inflation data failed to drive buyer demand for BTC and BTC-spot ETFs. On Wednesday, the Nasdaq Composite Index consolidated its gains from Tuesday (2.43%) on rising expectations of multiple 2024 Fed rate cuts.

Expert Views on Crypto-Spot ETFs and US Politics

ETF Store President Nate Geraci shared comments from leading ETF attorney Jeremy Senderowicz, saying,

“Says approval of ETF share class structure could hinge on upcoming election (something obviously discussed re: solana ETF, etc as well).”

Senderowicz stated,

“If the Republicans win the election, there is a good chance these applications will be approved in one form or another, and if the Democrats win the election, there is a good chance they won’t be. An SEC controlled by Republican appointees likely would be much friendlier to innovation – including approving these applications.”

According to the latest FiveThirtyEight US presidential election polls, Kamala Harris leads Trump by 5 points.

The election polls may influence BTC price trends, with a Kamala Harris lead being BTC-price negative.

US Economic Calendar

US initial jobless claims and retail sales could influence market risk sentiment. An unexpected spike in jobless claims and a slide in retail sales could fuel fears of a US economic hard landing. Deteriorating labor market conditions may affect wages, consumer confidence, and spending. Private consumption contributes over 60% to GDP.

BTC Price Trends

Better-than-expected jobless claims and retail sales figures could push BTC toward $65,000. Conversely, weak numbers may retrigger fears of a US recession, dragging BTC toward $55,000.

Technical Analysis

Bitcoin Analysis

BTC sat below the 50-day and 200-day EMAs, sending bearish price signals.

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

US economic data, Mt. Gox and US government supply news, and US BTC-spot ETF market flow trends need consideration on Thursday.

On the other hand, a break below $57,500 could signal a drop to $55,000. A fall through $55,000 could bring the $52,884 support level into play.

With a 43.24 14-Daily RSI reading, BTC could fall the $55,000 handle before entering oversold territory.

Ethereum Analysis

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

An ETH break above the $2,664 resistance level could support a return to $2,800. Furthermore, a breakout from $2,800 could give the bulls a run at the $3,033 resistance level and the 50-day EMA. Selling pressure could intensify at the $3,033 resistance level. The 50-day EMA is confluent with the resistance level.

US ETH-spot ETF market flow trends also require consideration.

Conversely, an ETH drop below $2,600 could give the bears a run at the $2,403 support level.

The 14-period Daily RSI reading, 40.30, suggests an ETH fall to the $2,403 support level before entering oversold territory.