BTC Rally Pauses For Now

The Bitcoin rally looks to have lost momentum for now with the market failing to make a fresh break higher despite buoyant risk appetite and strong stock market gains. It is perhaps this strong equities performance which his diluted demand for BTC recently with the futures market stalled around the $81k level over the last week. Now up around 37% of the year’s lows, some consolidation is reasonable to expected and should likely pave the way for a fresh break higher in coming weeks. Stalled progress in US/Iran peace talks is likely a key driver behind the current malaise also given the strong upside response we saw to growing optimism for a deal in recent weeks. Indeed, if we see any breakthrough in talks (perhaps positive headlines on the back of the Trump/Xi meeting this week), this could help propel BTC higher near-term.

ETF Inflows Rising

Despite the lack of upside momentum in recent days, BTC ETF inflows have continued grow, suggesting the likelihood of a fresh break higher soon. Institutional investors have been piling back into BTC over the last two months, reversing the heavy outflows seen across Q4. With institutional investors positioning for higher price levels, bulls are now just awaiting a fresh catalyst to spark a breakout move. However, the risk is that if US/Iran talks remain stalled and indeed, if tensions mount and risks of a return to war, that BTC will come under fresh selling pressure. Any exodus of ETF capital could fuel heavy losses in BTC accordingly. As such, Iran headlines remain the key input here for BTC traders.

Technical Views

BTC

The market remains stalled for now against the top of the corrective bull channel, though still above the $80,185 level. While above here, focus is on a fresh push higher, despite flatter momentum studies readings, with $84,530 the next target for bulls. To the downside, any break lower will see $74,270 come into view as the next support to watch.