BTC Price Forecast: ETF Inflows Cushion Losses Amid Middle East Tensions

Bitcoin Retreats After $65K Surge—Will ETF Inflows Drive the Next Rally?

On Monday, October 7, BTC declined by 0.89%, reversing a 1.19% gain from the previous session to close at $62,254. BTC rallied to a high of $64,482 before falling into negative territory. The loss mirrored the broader crypto market, which declined by 0.91% to a total crypto market cap of $2.118 trillion.

Middle East Conflict Impacts BTC Demand

The escalation in the Middle East conflict continued to impact buyer demand for riskier assets. WTI crude oil broke above $77 on Monday, highlighting investor unease. An escalation in the conflict could disrupt oil supply, potentially pushing WTI crude to $80.

The upswing in crude oil prices contributed to losses across the US equity markets and cryptos. Notably, the Nasdaq Composite Index slid by 1.18%, closing at 17,924.

US Fed Rate Path and BTC

Investor sentiment toward the Fed rate path also affected BTC demand. Friday’s US Jobs Report strengthened expectations that the US could avoid an economic recession, boosting buyer demand for riskier assets. However, expectations of a less dovish Fed rate path weighed on the markets on Monday.

According to the CME FedWatch Tool, the probability of the Fed holding interest rates steady in November increased from 2.6% on Friday to 12.7% on Monday. Last week, the chances of a 50-basis point Fed rate cut fell from 53.3% (September 27) to 0% (October 4). A higher-for-longer Fed rate path adversely impacts demand for riskier assets.

US BTC-Spot ETF Flows Cushion the Downside

On Monday, positive sentiment toward the US economy continued to fuel demand for US BTC-spot ETFs. According to Farside Investors,

• On Monday, Fidelity Wise Origin Bitcoin Fund (FBTC) saw net inflows of $103.7 million. (Previous day: +$13.6 million).
• Bitwise Bitcoin ETF (BITB) had net inflows of $13.1 million. (Previous day: $15.3 million).
• ARK 21Shares Bitcoin ETF (ARKB) reported net inflows of $12.6 million. (Previous week: +$5.3 million).

Excluding iShares Bitcoin Trust (IBIT) flows, the US BTC-spot ETF market had net inflows of $137.3 million (Previous day: +$25.6 million).

Monday’s inflows should support BTC demand at the start of Tuesday’s session. Sustained inflows could continue to drive BTC demand, especially as concerns about the Middle East and the Fed rate path linger. Increasing inflows into the US BTC-spot ETFs may push BTC through $65,000.

Outlook

Investors should remain vigilant. 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 to monitor ETF inflows closely 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 hovers above the 50-day and 200-day EMAs, sending bullish price signals.

A break above the $64,000 resistance level and Monday’s high of $64,482 could give the bulls a run at the September 27 high of $66,520. Furthermore, a return to $66,520 may signal a move toward the $69,000 resistance level.

Investors should consider news from the Middle East, upcoming US economic indicators, and US BTC-spot ETF market flows.

Conversely, a break below the 50-day EMA may bring the $60,365 support level and the 200-day EMA into play. A fall through the 200-day EMA could give the bears a run at $55,000.

With a 53.04 14-day RSI reading, BTC could climb to the $69,000 resistance level before entering overbought territory.

Ethereum Analysis

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

An ETH break above the 50-day EMA could signal a move toward the $2,664 resistance level. Furthermore, a breakout from the $2,664 resistance level may bring the 200-day EMA and $3,000 into play.

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

Conversely, an ETH break below the $2,403 support level could lead to a decline toward the $2,124 support level.

The 14-period Daily RSI reading, 45.70, suggests an ETH fall to the $2,124 support level before entering oversold territory.