Bitcoin Drops Under $59K as BTC Demand Wanes, BlackRock’s IBIT Logs Outflows for the Second Time

1) According to CoinGecko’s data, Bitcoin decreased by more than 1% within the past 24 hours. This drop raises its weekly losses to over 3.5%. If this trend continues, it seems that Bitcoin will end August with a decline of around 8%. With one day left in the month, demand for Bitcoin has been low and has even started to decrease in recent weeks, as previously mentioned.

Yesterday saw a third straight day of $71 million in withdrawals from Bitcoin Exchange-Traded Funds (ETFs) listed on U.S. exchanges, according to SoSoValue data. This suggests that institutional investors are pulling their investments out of the market.

According to CryptoQuant’s recent report, there’s been an uptick in demand for Bitcoin from U.S. retail investors, as the price difference between Bitcoin on the Coinbase exchange has risen to its highest point since July.

Moreover, Bitcoin is once more being transferred from cryptocurrency exchanges outside the United States to Coinbase, indicating increased interest among U.S. investors and a pattern that traditionally predicts higher prices.

In the forthcoming weeks, traders predict increased market turbulence. Over the last seven days, Bitcoin has mainly moved within a narrow range, even with positive signs of interest rate cuts and backing from Republican presidential nominee Donald Trump. This has had an influence on overall crypto market sentiment.

“Last week was quiet for cryptocurrencies as Bitcoin and Ethereum fluctuated within approximately 1.5% of their previous prices. Inflows into ETFs have remained relatively low, according to Augustine Fan, head of insights at SOFA, in his weekly report to clients.”

Anticipating a surge in market activity following the US Labor Day and leading into the upcoming Non-Farm Payroll report, which could mark the beginning of a bustling Fall season. Additionally, political headlines are expected to become more significant, especially with the recent announcement from Harris/Walz regarding their plans to increase taxes substantially.

Traders at QCP Capital, based in Singapore, believe the financial landscape will stay volatile and uncertain, with prices likely fluctuating erratically rather than following a clear trend.

As a researcher, I’ve observed that up until October, there’s a prevailing trend towards purchasing protective options (puts) in both Bitcoin and Ethereum. This suggests that the market maintains a cautious stance regarding potential downward movements. In the run-up to the upcoming non-farm payroll report, I anticipate market volatility will gradually decrease as investors prepare themselves for possible interest rate reductions by the Federal Reserve, positioning their strategies accordingly.

According to the latest reports, and as confirmed by Federal Reserve Chair Jerome Powell, there will be a shift towards reduced lending rates starting next month. Historically, this move has boosted optimism among investors because it makes money more affordable, which in turn stimulates growth in areas considered riskier.

As a analyst, I foresee that without any catalysts appearing in the immediate future, I expect prices to keep fluctuating within their current range as we approach September.