Bitcoin Approaches Key Support Level But Analysts Advise Caution

CoinJ.com Reports: The recent rebound of Bitcoin has brought it close to its monthly high in August, with analysts calling this level a new historical high. During European trading hours on Tuesday, the trading price of Bitcoin was $63,710, a 0.4% increase in the past 24 hours and a roughly 9% increase in the past week, according to CoinGecko data. In a report shared with Decrypt, Fairlead Strategies stated that Bitcoin has continued its relief rebound and is now testing the resistance of its 200-day moving average (around $639,000), which is roughly in line with the previous peak in August. The company warned that “short-term overbought conditions are in place,” indicating the possibility of a pullback before any potential breakthrough. Meanwhile, a recent report from Bitfinex Alpha emphasized the importance of the $65,200 high on August 25th. The report highlighted the significance of Bitcoin’s recent price trend relative to the previous high, stating that Bitcoin is now close to the $65,200 high on August 25th. “This level is important because BTC has not yet surpassed a high since reaching a historical high of $73,666 on March 14th before forming a local/new bottom.” Meanwhile, BRN analyst Valentin Fournier stated that Bitcoin’s volatility is decreasing, with prices remaining above the key level of $62,500. He said this may pave the way for further upward movement, but the relative strength index (RSI) is still rising, indicating a possible reversal. The RSI tracks the speed and magnitude of recent price changes in an asset to detect overbought or oversold conditions. He said, “We recommend maintaining a moderate level of exposure to capture potential gains while guarding against the possibility of a short-term decline.” The cryptocurrency market continues to see mixed flows of ETF products, according to data from SoSo Value. On Monday, the net inflow of Bitcoin spot ETFs was $4.5 million, with Fidelity (FBTC) and BlackRock (IBIT) contributing inflows of $24.9 million and $11.5 million, respectively. This was offset by the outflow of $40.3 million from Grayscale (GBTC). In contrast, Ethereum spot ETFs saw a net outflow of $79.2 million that day. Grayscale’s ETHE led the way with an outflow of $80.5 million, while Bitwise’s ETHW saw an inflow of $1.3 million. Despite the outflow of ETF funds, the price of Ethereum has shown resilience, currently trading at $2,655, up 0.5% in the past 24 hours and up 15% in the past week. Bitfinex’s report also expressed concerns about Bitcoin’s recent price trends and the nature of derivative activity. The analysts wrote, “The open interest (OI) has reached $19.43 billion, while the price is still about $1,000 below the local high.” “This may suggest that much of the recent price action in BTC is being driven by perpetual and futures BTC trading rather than spot market activity.” Edited by Stacey Elliott.