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BTC Dips: US Government BTC Sale Looms, ETF Inflows Offer Some Relief
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Key Points:
- Bitcoin dips below $62K on concerns of a US government sale of 69,000 BTC, raising supply risks and market concerns.
- US BTC-spot ETFs saw $235.2M inflows on October 7, but net outflows loom as market braces for supply shocks.
- Fed speakers and FOMC meeting minutes today could influence BTC price trends amid broader market uncertainty.
In this article:
Bitcoin Dips Below $62,000 on Oversupply Risk
On Tuesday, October 8, BTC dipped by 0.12%, following a 0.89% loss from the previous session to close at $62,181. BTC mirrored the broader crypto market, which slipped by 0.06% to a total crypto market cap of $2.117 trillion.
US Government Receives Green Light to Sell 69,000 BTC
On Tuesday, reports circulated that the US government received approval to offload 69,000 BTC. FreeSamourai shared the news, stating,
“In the never-ending “Silk Road” [sic] USG BTC news, Battleborn Investment’s appeal to the Supreme Court will not be heard and the 69k BTC forfeited by Individual X, moves from the seized bucket to the forfeited and sellable bucket.”
According to court documents, the judge ordered the forfeiture of the crypto holdings in August 2022. The Supreme Court’s ruling means the US government can sell the seized BTC.
According to Arkam Intelligence, the US government currently holds 203,239 BTC in its crypto stockpile, equivalent to $12.69 billion. Although there is concern about the supply-demand balance, ETF inflows have recently mitigated this risk.
US BTC-Spot ETF Flows Counter Oversupply Risk
On Monday, October 7, the US BTC-spot ETF market saw net inflows of $235.2 million. However, the spot ETF market faces the possibility of net outflows on Tuesday, October 8.
According to Farside Investors,
- On Monday, Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $48.8 million. (Previous day: +$103.7 million).
- Grayscale Bitcoin Trust (GBTC) had net outflows of $9.4 million. (Previous day: zero net flows).
Excluding iShares Bitcoin Trust (IBIT) flows, the US BTC-spot ETF market reported net outflows of $58.2 million.
While there is short-term concern over potential net outflows, the broader inflow trends in September have helped balance supply-demand concerns.
US Economic Calendar: Fed Speakers and the FOMC Meeting Minutes
Later today, the FOMC Meeting Minutes will require consideration. Insights into the economic outlook and the Fed rate path could influence demand for BTC.
Additionally, investors should monitor FOMC member speeches. Fed Vice Chair John Williams and FOMC members Thomas Barkin, Austan Goolsbee, and Philip Jefferson are on the calendar to speak. Their reactions to the US Jobs Report and views on the Fed rate path could affect BTC demand.
The Fed’s rate path influences buyer demand for riskier assets. Support for multiple Q4 2024 Fed rate cuts could drive BTC toward $65,000. Conversely, calls to delay rate cuts could send BTC below $60,000.
Outlook
Investors should remain alert. BTC supply risk, the Fed speakers, and updates from the Middle East may continue affecting BTC price trends. An escalation in the Middle East conflict could trigger a flight to safety, possibly reducing BTC demand.
Traders should also continue monitoring ETF inflows as they may affect short-term BTC’s supply-demand trends. Stay updated with our latest news and analysis to manage your BTC and crypto exposures.
Technical Analysis
Bitcoin Analysis
BTC remains above the 50-day and 200-day EMAs, affirming bullish price signals.
A breakout from the $64,000 resistance level and October 7’s high of $64,482 could signal a move toward the September 27 high of $66,520. Furthermore, a break above $66,520 may give the bulls a run at the $69,000 resistance level.
Investors should consider news from the Middle East, upcoming Fed speeches, and BTC supply-demand trends.
Conversely, a fall through the 50-day EMA may signal a drop to the $60,365 support level and the 200-day EMA into play.
With a 51.52 14-day RSI reading, BTC may rise to the $69,000 resistance level before entering overbought territory.
Ethereum Analysis
ETH remains below the 50-day and 200-day EMAs, confirming bearish price trends.
An ETH breakout from the 50-day EMA could give the bulls a run at the $2,664 resistance level. Furthermore, a break above the $2,664 resistance level may signal a move toward the 200-day EMA.
US ETH-spot ETF market-related updates also require consideration.
Conversely, an ETH drop below the $2,403 support level could bring the $2,124 support level into play.
The 14-period Daily RSI reading, 47.43, indicates an ETH drop to the $2,124 support level before entering oversold territory.
About the Author
Bob Masonauthor
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.
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