Bitcoin ETF inflows resume with $192.3m as BTC rebounds from $65K 

On October 23, BlackRock’s IBIT investors capitalized on Bitcoin’s decline of more than 3%, injecting $317 million into the fund as the cryptocurrency tested a critical support level at $65,000.

On October 23, Bitcoin faced significant downward pressure and closed down 3.3% at $66,649, a stark contrast to the 0.12% gain in the previous session. Testing buyer demand at the $65,000 level, BTC managed to find support at the session low at $65,161 before surging above the $66,000 level.

The broader cryptocurrency market mirrored this decline, losing 1.45% to a total market cap of $2.242 trillion.

This decline may be due to changing sentiment driven by the upcoming US Presidential Election and concerns about the Federal Reserve’s interest rate path.

Risk assets, including Bitcoin, experienced selling pressure as investors grew wary of tight monetary policy. The Nasdaq Composite Index fell 1.60% as 10-year U.S. Treasury yields rose to 4.26%, the highest since July; This signaled that the US economy was strengthening and defied expectations of multiple interest rate cuts by the Fed in Q4 2024.

US presidential election and market impact

As the US Presidential Election approaches, uncertainty further strains investor sentiment. Latest polls show Vice President Kamala Harris with a narrow 1.7-point lead over former President Donald Trump, but Trump has narrowed the gap significantly from a previous 3.7-point deficit.

Despite Harris’ lead, betting platform Polymarket gives Trump a higher chance of victory at 59.7% compared to Harris’ 40.4%.

A Trump presidency is expected to create inflationary pressures and potentially lead the Federal Reserve to take a more hawkish stance. This could reduce demand for riskier assets, including Bitcoin, while Trump’s crypto-friendly policies could support long-term demand for the digital asset.

Spot Bitcoin ETFs fuel recovery

Despite macroeconomic uncertainties, Bitcoin has rebounded from the $65,000 support level, driven by renewed inflows into spot Bitcoin ETFs, particularly BlackRock’s IBIT. This follows outflows the previous day, when $79.1 million exited the fund due to investors’ concerns that Bitcoin’s rally could lose momentum.

On October 23, 12 spot Bitcoin ETFs recorded net inflows of $192.31 million; BlackRock’s IBIT contributed the lion’s share of $317.47 million. This marks the fourth time in six trading days that the fund has attracted inflows of over $300 million, with total net inflows reaching over $23 billion as of October 21.

Grayscale’s Bitcoin Minit Trust also added to the positive sentiment by recording inflows of $4.71 million, while other ETF products including ARKB, BITB and VanEck saw mass outflows of $129.8 million, reflecting the more cautious stance of some market participants.

Technical outlook for Bitcoin

Despite Wednesday’s price drop, Bitcoin remains above key technical levels, including the 50-day and 200-day exponential moving averages, strengthening bullish signals.

BTC price, 50-day EMA and 200-day EMA chart | Source: crypto.news

A potential break above the $69,000 resistance level and the October 21 high at $69,402 could pave the way for a move towards the psychological $70,000 barrier. If Bitcoin successfully clears $70,000, bulls may attempt to challenge the all-time high at $73,808.

However, a decline below $66,500 could reignite the bearish trend and refocus on the critical $65,000 support level. A decline below $65,000 could open the door for a deeper correction and the next key support is $64,000.

BTC RSI chart | Source: crypto.news

With the 14-day Relative Strength Index reading at 60, Bitcoin has the potential to reach $70,000 before approaching overbought conditions.

At the time of writing, Bitcoin (BTC) changed hands at $67,345, up 0.5%.