Bitcoin's Direction to Be Decided by 'Two Price Lines'... $74,000 vs $68,900

▲ Bitcoin (BTC) ©CoinReaders

Bitcoin (BTC) stands at a critical juncture over whether it will recover to $74,000. Amid rising market instability due to outflows from US Bitcoin spot ETFs and the hawkish stance of the Federal Reserve (Fed), warnings are also emerging that a collapse of the $68,900 support line could push it down to the early $60,000s.

According to investment media TradingNews on May 29 (local time), Bitcoin traded near $73,600, rebounding approximately 1.1% during the session, but still remains below key moving averages. The outlet analyzed that the 50-day and 200-day moving averages have turned downwards, and a bearish structure has become particularly clear on the 4-hour chart. Volatility has compressed to approximately 4%, and the market is assessed to have entered a phase where its major direction could be determined by the next macroeconomic variables.

The primary cause of the recent price slowdown has been identified as outflows from US Bitcoin spot ETFs. On this day alone, a net outflow of approximately $223 million occurred, and the cumulative net outflow over six consecutive trading days in late May reached approximately $1.26 billion. Notably, the largest single-day outflow recorded was $648.64 million. In contrast, April saw net inflows of approximately $2 billion to $2.44 billion, and the cumulative inflow since the ETF launch has exceeded $57 billion. The outlet diagnosed that institutional investors' shifting positions are changing the market's supply and demand structure itself.

In the ETF market, BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC) were analyzed to have overwhelming influence. IBIT's assets under management were tallied at approximately $67 billion, and FBTC's at approximately $17 billion. The total assets of the 11 Bitcoin spot ETFs amounted to approximately $98.87 billion, which accounts for about 6.49% of Bitcoin's total market capitalization. The outlet specifically assessed that the outflow of $448 million from the single IBIT product in one day sent a strong sell signal across the entire market.

The macroeconomic environment is also turning unfavorable for risk assets. The US Personal Consumption Expenditures (PCE) inflation indicator has risen to its highest level in approximately three years, and the market is reflecting a more hawkish monetary policy since the launch of the new Fed Chairman Kevin Warsh's tenure. US 30-year Treasury yields are once again above 5%, posing a burden for risk assets like Bitcoin, which do not offer yields. Market sentiment has also cooled sharply. The Fear & Greed Index has fallen to a level of 22, entering the 'extreme fear' zone.

Technically, $68,900 is cited as a key support line. Analysis suggests that if this level breaks, further downside potential could open up to the $65,257 structural support line. Conversely, if it recovers to $74,000 on a closing basis, a path for a rebound to $76,900, and further to the $80,000-$80,500 range, could reopen. The outlet reported that the market has currently entered an extreme compression phase, and with open interest and leveraged positions accumulating, there is a high probability of strong volatility occurring in one direction or the other.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*