BTC Selling Continues

Bitcoin remains on watch ahead of the weekend with BTC futures now testing YTD lows. This is a disappointing development for bulls given that just a few weeks ago it looked like a topside break was on the cards after a more than 30% rally off the lows. Fading optimism over US/Iran peace talks and a hawkish shift in traders’ Fed expectations have combined to weigh heavily on crypto sentiment.

Record ETF Outflows

The bearish shift has been largely driven by the record outflows we’ve seen from crypto ETF in recent weeks. Institutional investors have moved rapidly out of crypto exposure with industry data showing almost $4 billion in outflows over the last two weeks marking a new record. With 12 consecutive days of outflows this is also the longest period of capital flight we’ve seen.

US Data On Watch

Looking ahead, BTC is vulnerable to a fresh break lower ahead of the weekend if tomorrow’s US jobs figures surprise to the upside. Traders have turned more hawkish on the Fed recently in line with rampant inflation and a patch of stronger data generally. With pricing for a Fed hike by year end now above 50%, BTC is at risk of a much stronger move lower if that pricing starts to move higher. As such, any upside surprises tomorrow could see USD rising firmly, weighing on BTC and the wider risk complex.

Technical Views

BTC

The sell off in BTC has seen the market collapsing out of the bull channel that had framed the recovery off YTD lows. Price is now testing those lows around the $60,030 - $62,470 zone. If we break below there, the path is open for a test of deeper support down at the $53,030 level next.