Institutional Demand Supports BTC
Will BTC repeat its July crash? Despite the risk of market disruption from central bank policy divergence, institutional demand remained robust.
The US BTC-spot ETF market extended its inflow streak to three weeks in the week ending September 19, sending BTC above $115,000. According to Farside Investors, the US BTC-spot ETF market reported total net inflows of $886.5 million, taking September’s net inflows to $3.46 billion.
BlackRock’s (BLK) iShares Bitcoin Trust (IBIT) reported weekly net inflows of $866.8 million, continuing to dominate the crypto-spot ETF markets.
US Economic Calendar in Focus
Looking ahead, it could be another crucial week for BTC. US economic data, Fed Chair Powell, and the Bank of Japan will be in focus.
Weaker US services sector activity, rising jobless claims, and softer-than-expected inflation could lift bets on multiple Fed rate cuts in the fourth quarter. BTC could face selling pressure if the BoJ signals an October rate hike, which may trigger another yen carry trade unwind.
Conversely, fading expectations for multiple Q4 policy adjustments could ease the threat of a carry trade unwind. However, a less dovish Fed rate path may limit gains, subject to BTC-spot ETF flows.
It could be a key test for BTC, which has enjoyed reduced volatility, boosting institutional demand.
Crypto commentator Joe Consorti commented:
“Bitcoin has now spent a combined 67 days above $110k with remarkably low volatility. In 2021, BTC only spent 40 days above 60k with extreme volatility. Bitcoin’s maturation as an asset within such a short window is nothing short of astounding.”
Low volatility, a dovish Fed policy stance, and rising institutional demand could create a perfect storm, potentially mitigating risks of a yen carry trade unwind.
Consorti recently hinted at fresh highs, stating:
“Bitcoin has historically risen 29.23% in October. That would imply a price of $150,000. Time will tell.”
ETH Dips Below $4,500 as September ETF Inflows Slow
While Bitcoin held above $115,000 on strong institutional demand, Ethereum (ETH) faced selling pressure this week, pulling further back from August’s record high of $4,958.
Despite rising 0.24% on Saturday, September 20, ETH is down 2.69% for the current week. Waning inflows into US ETH-spot ETFs have tempered bullish sentiment.
The US ETH-spot ETF market reported total net inflows of $418.3 million in the current month. Unless there is a surge in demand, monthly inflows will be significantly lower than those in July ($4.86 billion) and August ($3.87 billion).
Explore our ETF flow deep-dive to see which tokens are winning the most capital.
Key Drivers for BTC Price Outlook
Several macro and market factors will drive BTC’s near-term outlook:
- Legislative news: the Market Structure Bill’s progress on Capitol Hill.
- US economic data: US Services PMI, Jobless Claims, and Personal Income and Outlays report.
- Fed Chair Powell and FOMC member speeches.
- US BTC-spot ETF flows.
BTC Price Scenarios:
- Bullish Scenario: Easing US recession risks, softer inflation, dovish Fed rate cues, bipartisan support for the Market Structure Bill, and ETF inflows. These factors could send BTC toward its record high of $123,731.
- Bearish Scenario: Rising US stagflation risks, hawkish Fed rhetoric, legislative roadblocks, a yen carry trade unwind, or ETF outflows could push BTC toward $100,000.
Technical Analysis
Bitcoin Analysis
BTC trades above the 50-day and the 200-day Exponential Moving Averages (EMA), suggesting bullish momentum
- Upside Target: A breakout above the September 18 high of $117,937 could pave the way toward the $120,000 level. A sustained move through $120,000 may enable the bulls to target the record high of $123,731.
- On the downside, a drop below $115,000 and the 50-day EMA could expose the crucial $100,000 psychological floor.
