Bitcoin tops $60,000, erasing Wednesday’s losses

• U.S. spot Bitcoin ETFs saw outflows of $105.3 million on Wednesday, marking a second consecutive day of outflows.
• On-chain data shows a bearish outlook for Bitcoin as its funding rates are negative.
• French authorities grant $5.5 million bail to Telegram founder Pavel Durov, bolstering crypto market sentiment.

Bitcoin (BTC) price is recovering from Wednesday’s losses and is trading up 2.3% at $60,320 at the time of writing on Thursday. However, the recovery could be short-lived as parameters in the chain project a negative outlook as shown by the negative funding ratios. At the same time, US spot Bitcoin ETFs posted their second consecutive day of outflows on Wednesday.

Daily Market Reasons: Bitcoin ETFs Have Second Consecutive Day Out

• U.S. spot Bitcoin ETFs posted a second straight day of outflows this week, $105.3 million on Wednesday, according to Coinglass data. As a result, BTC fell 0.64% on Wednesday and also fell below $58,000. If this trend continues, the price of Bitcoin could fall further, as ETF net flow data is crucial to understanding market dynamics and investor sentiment. The combined Bitcoin reserves held by the 11 U.S. spot Bitcoin ETFs stand at $46.02 billion, a figure that has declined since late July.

Bitcoin Spot ETF net flow chart

Bitcoin ETF AUM chart

• According to NBC News, reports have surfaced that prosecutors in Paris have formally charged Telegram founder Pavel Durov. On Wednesday, French judges set his bail at 5 million euros ($5.5 million). Under bail conditions, Durov must remain in France, although prosecutors say he has “nothing to hide”.

Pavel Durov, the CEO and co-founder of the news and messaging app Telegram, was arrested last weekend at Le Bourget airport and appeared before a judge on Wednesday. French authorities accuse him of enabling criminal gangs to traffic drugs, commit fraud, distribute child pornography and engage in money laundering, all through Telegram. The bail event caused some relief in the crypto community as Durov is an influential figure in the crypto space.

• The CryptoQuant funding rates chart is a crucial indicator for gauging futures market sentiment. Bitcoin’s is currently at -0.002, indicating aggressive short selling and liquidation of long positions. With funding rates now negative, reflecting bearish sentiment and the dominance of short sellers, it shows that short-term traders are willing to pay long-term traders, suggesting bearish sentiment for Bitcoin in the market.

Bitcoin Funding Rates Chart

• According to Lookonchain data, a whale bought 1,000 BTC worth $59.65 million from the Binance exchange on Thursday. This whale wallet currently holds 7,559 BTC worth $450 million.

Technical Analysis: BTC is ready for a downward leg

Bitcoin price bounced around the daily resistance level at $65,379 on Sunday, down 8% over the next three days. On Thursday, it is recovering slightly by 2.3% to $60,320 at the time of writing.

If BTC continues to decline and close below the $58,783 level, it could further decline by 4.5% to retest the daily support at $56,002.

The Relative Strength Index (RSI) on the daily chart has dropped below its neutral level of 50, and the Awesome Oscillator (AO) is about to close below its neutral level of zero. When both indicators trade below their neutral levels, it suggests weak momentum and an impending bear trend.

BTC/USDT Daily Chart

However, let’s assume Bitcoin price finds support at around $58,783 and closes above $62,042, its 61.8% Fibonacci retracement level (drawn from a late July high to an early August low) . In this case, the bear thesis will be invalidated. BTC could rise 5.5% to revise its daily resistance level at $65,379.