BTC Dips as Mt. Gox Wallet Movements and ETF Flows Stir Market Sentiment

BTC Drops Below $59,000 on Oversupply Fears

On Tuesday, August 20, BTC declined by 0.73%, partially reversing a 1.73% gain from the previous day, to close at $59,069. BTC climbed to an early high of $61,403 before sliding to a low of $58,635. Overall, the total crypto market cap fell by 0.55% to $2.050 trillion.

Oversupply Concerns Impact BTC Demand

Arkham Intelligence reported a 13,265 ($784.20 million) BTC transfer to two wallets on Tuesday. The transfers likely related to the repayment of BTC to creditors, possibly increasing BTC supply.

The recipient wallets likely belong to Mt. Gox, whose total BTC holding remained at 46,164 BTC ($2.72 billion).

Mt. Gox collapsed in February 2014, one week after suspending withdrawals. At the time of the collapse, BTC was about $600. Creditors may flood exchanges with sell-orders to cash in sizeable gains. Increasing sell-orders could impact supply-demand trends, possibly affecting BTC demand at current price levels.

US BTC-Spot ETF Market Sees Continued Inflows

US BTC-spot ETF market inflows partially offset the effect of the Mt. Gox transfers.

According to Farside Investors,

• Grayscale Bitcoin Trust (GBTC) saw net outflows of $12.8 million.
• Bitwise Bitcoin ETF (BITB) had net outflows of $6.5 million.
• ARK 21Shares Bitcoin ETF (ARKB) reported net inflows of $51.9 million.

Excluding flow data for iShares Bitcoin ETF (IBIT) and Invesco Galaxy Bitcoin ETF (BTCO), the US BTC-spot ETF market saw total net inflows of $32.6 million. On Monday, the spot ETF market had net inflows of $62.1 million, extending its net inflow streak to three sessions.

Investor bets on multiple 2024 Fed rate cuts and a soft US economic landing likely drove demand for spot ETFs.

FOMC Meeting Minutes to Impact BTC Sentiment

On Wednesday, August 21, the FOMC Meeting Minutes may influence buyer demand for BTC. Increasing Fed concerns about the US labor market and the economic outlook could spook investors. A rising threat of a US recession (hard landing) could affect US BTC-spot inflows and demand.

Investors should also consider supply and demand trends, with Mt. Gox and the US government holding sizeable BTC stockpiles.

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, sending bearish price signals.

A breakout from the 200-day EMA could signal a move to the $60,365 resistance level. Furthermore, a break above the $60,365 resistance level may bring the 50-day EMA into play

US BTC-spot ETF market flow trends, supply-related news, and the FOMC Meeting Minutes 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 45.55 14-Daily RSI reading, BTC may drop to the $55,000 handle before entering oversold territory.

Ethereum Analysis

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

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

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

Conversely, an ETH drop below $2,500 could bring the $2,403 support level into play.

The 14-period Daily RSI reading, 38.46, indicates an ETH drop to the $2,403 support level before entering oversold territory.