Bitcoin Is Down but Not Out: The Resurgence Begins
Support at $112K Holds, Pushes Bitcoin Higher
Bitcoin’s bullish momentum dissipated after hitting the All-Time High (ATH) at $123K and the OG cryptocurrency started to move sideways in a tight range. Usually, periods of sideways movement are followed by a strong breakout, and last week, such a breakout happened, but to the south.
Bitcoin spot Exchange Traded Funds (ETFs) started to bleed money as outflows broke a streak of several weeks of inflows, and things looked grim for BTC bulls. However, the break of the $120K – $115K range did not generate a massive bearish move, and Bitcoin found support at $112K. At the time of writing, we have a nice bounce off this level, which may extend to the upper side of the Bollinger Bands.
According to data from on-chain analytics firm SoSoValue, net inflows for spot Bitcoin ETFs reached $91.55 million on Wednesday, snapping a 4-day outflow streak. ETF inflows and outflows are good indicators of Bitcoin’s strength and direction. If inflows start accumulating, it’s usually a good indication that the price will increase.
But perhaps more importantly, President Trump signed an executive order that will allow cryptocurrencies, among other assets, to be used in 401(k) retirement plans. This will boost institutional adoption and will open the door to the $12.5 trillion retirement market.
The order instructs the Labor Department to provide guidance and to re-evaluate the restrictions that are currently in place, aiming to allow crypto exposure in retirement plans. If Americans are going to tap into crypto for their 401(k) plans, this will probably fuel another massive surge in crypto prices, even if the effect will not be immediate.
Chart Analysis – BTC/USD
The bounce at $112,000 was textbook, and the price reversed as soon as it touched the level. This is a clear indication that buy orders were present around $112K and that bullish demand is still high.
The next move will largely depend on the additional buying volume that comes in. If volume increases, it will be a clear indication that traders and institutions are buying the dip and the bounce at $112K. If volume does not increase soon, the move may falter, and we may see another drop closer to support.
There is still a lot happening on the fundamental scene, including tariffs, and President Trump’s ongoing attempts to name a successor to the Fed Chair. These matters, among others, will affect the crypto market, which will translate into volatility on the crypto charts.
