Bitcoin price remains trapped below $85,000
Bitcoin entered the new quarter with its price still confined to a narrow range. The cryptocurrency was trading at $83,941.93 after spending more than a week between $82,000 and $85,000, extending a period of choppy, sideways price action.
Bitcoin briefly moved above $85,000 on Wednesday after weaker-than-expected U.S. inflation reduced expectations of further Federal Reserve rate hikes. Buyers were unable to sustain the breakout, however, and spot Bitcoin exchange-traded funds failed to provide additional support.
Bitcoin ETF inflows reverse after record streak
U.S.-listed spot Bitcoin ETFs recorded net outflows of $148.7 million on Wednesday, according to data from SoSoValue. The outflows ended a nine-day run of net inflows that attracted $3.08 billion, marking the largest inflow streak of the year by dollar value.
The momentum behind the ETF buying had already begun to weaken before the reversal. Daily inflows reached nearly $1 billion on Sept. 21 and then declined steadily over the following days. Analysts at Bitfinex said the pace of daily inflows must recover for Bitcoin prices to continue advancing.
Bitfinex metric shows weaker ETF absorption
Bitfinex analysts highlighted the importance of ETF demand in absorbing Bitcoin supply above the current price range. “Daily pace remains the key determinant for clearing overhead supply,” analysts said in a market note.
The Bitfinex Absorption-to-Emission Ratio, or BAER, compares the amount of Bitcoin purchased by ETFs during a session with the approximately 450 Bitcoin produced daily by miners. The ratio compressed from 25.6x on Sept. 21 to 1.8x on Sept. 29, indicating that ETF purchases had fallen much closer to the level of newly mined supply.
Why This Matters
Bitcoin’s ability to break out of its $82,000-to-$85,000 range depends in part on whether ETF demand can regain momentum. The end of the nine-day inflow streak and the decline in the BAER suggest that institutional buying was providing less support by Sept. 29. According to Bitfinex, a renewed increase in daily ETF inflows would be needed to help Bitcoin clear the supply weighing on prices above the current range.
Frequently Asked Questions
What is Bitcoin’s current trading range?
Bitcoin remains between $82,000 and $85,000, with the reported price at $83,941.93.
Why did Bitcoin’s ETF inflow streak end?
U.S.-listed spot Bitcoin ETFs recorded $148.7 million in net outflows on Wednesday after a nine-day inflow streak that brought in $3.08 billion. The source does not identify a specific cause for the reversal.
What does the BAER measure?
The Bitfinex Absorption-to-Emission Ratio measures ETF Bitcoin purchases against the roughly 450 Bitcoin produced by miners each day. It fell from 25.6x on Sept. 21 to 1.8x on Sept. 29.
Leave a Reply