Bitfinex analyst: BTC's current round of selling pressure may be coming to an end

On Monday, financial markets fluctuated again, with U.S. stocks opening high and closing low, and the crypto market continuing to follow the U.S. stock market.

The volatility stemmed mainly from weaker-than-expected U.S. manufacturing data, which reignited debate over whether the Federal Reserve would start cutting interest rates as early as September. The Chicago Mercantile Exchange's FedWatch tool showed that expectations for a September rate cut had risen to 59% from 49% a week ago.

U.S. Treasury yields are trending lower, with the 10-year Treasury yield falling about 10 basis points to around 4.394%. The U.S. dollar index also fell 0.50% and was trading at 104.107 at the time of writing.

At the close, the S&P 500 and Nasdaq 500 rose 0.11% and 0.56%, respectively, while the Dow Jones fell 0.3%.

According to BitPush data, Bitcoin (BTC) climbed from a low of $67,582 in the early hours of Monday morning to an intraday high of $70,300, before falling back to the $69,000 support level. At press time, BTC was trading at $69,133, up 2% in 24 hours.

In the altcoin market, most of the top 200 tokens by market cap rose. Meme coins continued to be favored by traders, with DOG•GO•TO•THE•MOON (DOG) leading the gains, up 21.5%, FLOKI (FLOKI) up 16%, and Kaspa in third place with a 14% increase. Highstreet (HIGH) fell the most, down 8.6%, followed by Safe (SAFE) and Aveo (AVEO), down 6.3%.

The current overall market value of cryptocurrencies is $2.57 trillion, and Bitcoin’s market share is 53.2%.

Is the new round of selling pressure about to end?

Analysts at Secure Digital Markets said: “BTC rebounded from Friday’s low of $66,700 over the weekend, despite experiencing its lowest weekend volume in four months. BTC has been testing higher levels but has been unable to break through the $72,000 mark for the past two weeks. Meanwhile, ETH/BTC is trending lower after maintaining highs since May 23, with BTC outperforming ETH by 5% since the recent peak of selling pressure.”

Although Bitcoin has struggled to break through $72,000, Bitfinex analysts say this correction phase may soon be over due to growing demand for spot BTC exchange-traded funds (ETFs).

Bitfinex analysts said: "After Bitcoin hit an all-time high of $73,666 in March, long-term holders (LTH) sold a large number of BTC, resulting in an increase in supply and a period of price adjustment and consolidation. Now it seems that this adjustment phase is about to end."

“Demand for Bitcoin ETFs has revived over the past two weeks, with net inflows reaching $136 million per day, more than four times the $32 million per day of selling pressure from miners after the halving,” they said.

Analysts also noted that LTH, which sold a large portion of its holdings at the peak, is reaccumulating Bitcoin for the first time since December 2023. This trend reflects the long-term bullish sentiment of holders. We are now in a phase of reaccumulation as we see selling pressure almost completely released and buying action becoming more and more consistent. "

It’s not just ETF flows that Bitfinex analysts are bullish on; Bitcoin reserves in exchange wallets are also declining.

Bitfinex said: “Over the past month, Bitcoin exchange reserves have been declining, while new accumulation addresses have been increasing.

A decline in the indicator is seen as bullish because it reduces the available supply, while a rise in the indicator is seen as bearish because it indicates that more Bitcoin is available for sale. Bitcoin exchange reserves have fallen sharply since February, leading to the recent price increase. This downward trend has intensified in recent days as investors expect Bitcoin to hit a new all-time high, further reduce supply and potentially set the stage for another rally.

“It’s time for Round 2 now, the momentum to $100,000 is strong,” market analyst Kaleo wrote on the X platform.

Crypto analytics firm Swissblock noted that the $70,000 and $73,000 levels constitute significant resistance that has limited BTC prices. “Short-term pullbacks are seen as buying opportunities, with the $67,000 level proving to be a reliable support level,” Swissblock said in a report.

From a macro perspective, the release of key US inflation data and the Federal Reserve meeting next week may also cause market fluctuations.