BTC Drops Back

Following a fresh push higher this week, BTC prices have once again turned back under the $108,855 level. The marker has proved a key resistance level this year with price currently suffering a fourth failure at the level. While the market holds below here, risks are skewed towards a deeper correction lower.

Institutional Demand

Institutional demand has returned this week with BTC ETF’s recording just under $0.4 billion in inflows, led by BlackRock which continues to attract the largest inflows. The ebb and flow of institutional money has become a key driver of BTC this year following the approval of BTC ETFs earlier in the year. Given the resistance we continue to see around the $108,855 level, the question now is whether BTC can make a sustained break above the level, leading to a fresh bull phase, or if a correction lower is coming?

US/China Trade Talks

The key issue to monitor here is US trade talks with China. BTC prices gained ground solidly last month as tensions between the two countries eased and a 90-day negotiations window was agreed. However, a lack of follow through after that saw BTC drifting lower again as institutional buyers moved capital elsewhere. However, there s growing optimism that trade talks are back on track now and if we see any positive headlines near-term this could easily pave the way for a breakout move in BTC. On the other hand, nay negative trade news runs the risk of fuelling a heavy exodus of capital from Wall Street, putting BTC at risk of a steep drop lower. As such, incoming US trade news flows will be key to monitor for BTC directional cues.

Technical Views

BTC

For now, BTC continues to struggle at the $108,855 level and while this region holds as resistance, a fresh test of the $100k mark looks viable. This is the key near-term pivot for the market with bulls needing to defend $100k to keep the focus on an eventual break higher towards the channel top around the $120k mark next. Below 4100k, $91,750 is next support to watch.