Bitcoin is recovering from last week’s decline, but the downtrend remains

• Bitcoin is up 2% on Monday after losing more than 10% in the past week.
• CryptoQuant’s Coinbase Premium Bitcoin Index is down, suggesting a decline in investor interest and activity in Coinbase.
• US spot Bitcoin ETFs saw outflows last week, and a whale wallet deposited over $240 million worth of BTC into Binance.
• Historically, September has not been a good month for Bitcoin, but the fourth quarter as a whole tends to end with gains.

Bitcoin (BTC) recovers slightly on Monday after falling 11% last week to close below $57,500, weighed down by weaker demand from US spot Bitcoin ETFs, which saw outflows of 279.4 million dollars. Additionally, a whale deposited a large amount of BTC into Binance, and the drop in investor interest and activity in Coinbase suggests that Bitcoin’s rebound may be short-lived at the start of a month that has historically not been positive for prices.

Daily Market Summary: Few signs of optimism

• CryptoQuant’s Coinbase Premium Bitcoin Index, a key indicator of how investors with large wallets are behaving, suggests waning interest from whales in the top crypto. The indicator shows the difference between Coinbase Pro price (USD pair) and Binance price (USDT pair). Coinbase Premium data is one of the indicators showing a sign of whale accumulation as the Coinbase Pro platform is considered the gateway for institutional investors to purchase cryptocurrencies.

For Bitcoin, the index fell from 0.077 to -0.004 from August 24 to September 1, trading below its 14-day Simple Moving Average (SMA) at 0.018. This indicates that whales are continuously selling at a lower premium. Additionally, it shows a decline in investor interest and activity in Coinbase.

Coinbase Premium Bitcoin Index Chart

• According to Lookonchain data, one whale deposited 4,164 BTC worth $243.8 million on the Binance exchange from Saturday to Monday. BTC fell 3% over the weekend.

• U.S. spot Bitcoin ETFs saw a total net outflow of $279.4 million last week, according to Coinglass data, a sign of bearish market sentiment. The combined Bitcoin reserves held by the 11 US spot Bitcoin ETFs amount to $43.62 billion.

Bitcoin Spot ETF Net Flow Data

• Historical Bitcoin Monthly Return (%) data from Coinglass shows how Bitcoin has performed in various monthly percentages. As shown in the chart below, Bitcoin generally had negative returns for traders in September, averaging -4.45%. However, data from the fourth quarter (Q4) showed an overall positive trend, with an average of +88.84%. Q4 will be important for the biggest cryptocurrency as the upcoming US election in November with favorable conditions could propel the price of Bitcoin.

Bitcoin Monthly Returns Chart (%)

Bitcoin Quarterly Returns Chart (%)

Technical Analysis: BTC closes below the support level

Bitcoin price closed on Sunday below the support level of $58,783 and reached a low of $57,201. On Monday, it is trading slightly higher by 2% at $58,435.

If the 50% price retracement level at $59,560 (drawn from a late July high to an early August low) holds as resistance, Bitcoin could fall 4% from the current trading level of 58,435 USD to retest the daily support level at USD 56,000.

The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart are trading below their neutral levels of 50 and zero, respectively. Both indicators suggest that neither the bulls nor the bears are in control.

BTC/USDT Daily Chart

In a positive scenario, Bitcoin price could break through the $59,560 resistance and close above $62,042, its 61.8% Fibonacci retracement level. In this case, the bearish thesis will be invalidated and BTC could rise by 5.5% to revise its daily resistance level at $65,379.