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Bitcoin Climbs Above $58,000, But Experts Say Bullish Sentiment Is Waning

source-logo  decrypt.co 12 September 2024 11:44, UTC

Bitcoin climbed 3% on Thursday morning, rising past $58,000, driven by investor response to August’s Consumer Price Index (CPI) report.

The headline CPI slowed to a 2.5% annual increase, slightly below the expected 2.6%, marking its lowest level since February 2021. However, core inflation, which excludes food and energy, rose 0.3% on a monthly basis, surpassing forecasts of 0.2% and maintaining an elevated year-over-year rate of 3.2%, well above the Federal Reserve’s 2% target.

Ethereum (ETH), the second-largest cryptocurrency by market cap, also saw gains, albeit a more modest 1.3% increase to $2,360, according to CoinGecko data.

Ethereum competitor Sui, a Layer 1 blockchain saw its SUI token surge 16% today, trading at $1.03, after Grayscale announced the launch of its Grayscale Sui Trust. Each share of the trust holds 14.95 SUI tokens, putting the value of each token in the trust at 90 cents, sparking investor interest in the project, according to Grayscale.

Meanwhile, Bitcoin spot ETFs were back to seeing outflows. Investors made a net total of $44 million worth of withdrawals from the funds on September 11, with (ARKB) leading with $54 million in outflows, according to data from SoSo Value.

Grayscale’s (GBTC) Bitcoin ETF reported an outflow of $4.5 million, while Fidelity's (FBTC) ETF showed an inflow of $12.5 million.

Ethereum spot ETFs also saw net outflows of $542,900, with VanEck’s ETHV reporting a $1.7 million outflow, partially offset by Fidelity's FETH inflow of $1.1 million, SoSoValue data shows.

Speaking with Decrypt, Peter Chung, Head of Research at Presto Labs said that the robust August CPI data triggered a risk-on trade, which extended into Asian trading hours and pushed Bitcoin higher.

“This shows the market is now in 'good news is good news' territory," he said.

Chung also noted that the recent all-time high in Bitcoin’s hash rate, reaching 680 EH/s, suggests the network's security may be undervalued. "The long-term Bitcoin bulls likely see this as a buying opportunity,” he said, “especially with the hashprice at an all-time low of $39/PH/s/day."

However, Illia Otychenko, Lead Analyst at CEX.IO, expressed caution about Bitcoin’s near-term momentum.

"Bitcoin’s bullish momentum appears to be fading," he told Decrypt, pointing to technical indicators like the Relative Strength Index (RSI) and moving averages. "A bearish divergence is forming, and the 200 SMA could act as resistance."

Otychenko also highlighted the potential for a death cross on the daily chart, signaling bear dominance, though he noted that a MACD crossover suggests bearish pressure might be short-lived.

RSI measures the speed and change of price movements, indicating potential overbought or oversold conditions, while moving averages smooth out price data to identify trends and potential support or resistance levels over specific time frames.

Edited by Stacy Elliott.

decrypt.co