Bitcoin Bounces, But Experts See ‘Sparse’ Catalysts for Significant Rally

By Murtuza Merchant

Bitcoin surged back above $57,000 on Tuesday morning as U.S. BTC exchange-traded funds returned to positive flows after an 8-day negative streak. However, experts are still cautioning about “sparse” catalysts for a sustained price rally over the short term.

The broader market is also seeing a recovery, with Solana (SOL) and Toncoin (TON) also seeing notable gains, up 4% and 4.4% respectively.

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is trading at $2,360, up 1.5%, although has slid by 12% over the last two weeks.

Spot Bitcoin ETFs on September 9 recorded a total net inflow of $28.7196 million. Fidelity's (FBTC) led the charge with a substantial inflow of $28.5 million, while Grayscale's (GBTC) saw an outflow of $22.7 million, according to data from SoSo Value.

The Ethereum ETF landscape presents a more mixed picture.

Grayscale’s Ethereum Trust (ETHE) reported significant outflows of $22.6 million, contributing to a total net outflow of $5.1 million for Ethereum spot ETFs. That marks the fifth consecutive day of net outflows. However, other funds showed positive momentum, with the Fidelity Ethereum Fund (FETH) and Bitwise Ethereum ETF (ETHW) recording inflows of $7.6 million and $1.8 million respectively, data shows.

Vishal Sacheendran, Head of Regional Markets at Binance, told Decrypt that despite the fluctuations, Bitcoin’s ability to recover demonstrates its enduring strength and the continued confidence in its long-term potential.

"Although past performance does not guarantee future results, October has historically been a strong month for Bitcoin,” he said, “with positive returns in 9 of the past 11 years and an average gain of 22.9%.”

In a note sent to Decrypt, Illia Otychenko, Market Research Analyst at CEX.IO said Bitcoin's price bounced off the 50-week Simple Moving Average (SMA), which acted as a key support during its early August dip, and is now attempting to hold above the 0.382 Fibonacci retracement level.

Fibonacci retracement is a technical analysis tool that uses key ratios to identify potential support and resistance levels in price charts, with the 38.2% level often considered significant by traders.

Otychenko also pointed out a potentially bullish indicator, stating, "Despite the recent price declines, the NVT (Network Value to Transactions) Golden Cross indicator is showing higher lows, while Bitcoin's price is making lower lows. This divergence indicates a potential bullish signal, suggesting that underlying network activity is strengthening."

The NVT Golden Cross indicator compares Bitcoin's network value to its transaction volume, with rising values potentially signaling bullish market sentiment.

Meanwhile, addressing the broader market context, Greg Cipolaro, Global Head of Research at NYDIG, said, "Unfortunately, potential upcoming near-term catalysts for Bitcoin are sparse at the moment. Most catalysts have to do with macroeconomic data (inflation, unemployment, GDP growth) or monetary decisions (FOMC interest rate decisions) and very few are crypto or bitcoin specific."

Sacheendran further said that as the U.S. election approaches, heightened attention and policy debate could drive significant shifts in market sentiment, which will also present a unique opportunity for the crypto industry to adapt, innovate, and align with emerging regulatory frameworks.

Edited by Stacy Elliott.

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