Bitcoin Price Rally May Be a Dead Cat Bounce as Death Cross Nears and ETF Outflows
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Bitcoin (CRYPTO: BTC) price is attempting to rebound after falling to a 2024-year low on Saturday. It jumped to $62,230, up modestly from the weekend low of $59,093. Still, this rebound may be a dead-cat bounce as ETF outflows are soaring and a death cross pattern is nearing.
Bitcoin Price Rises Amid ETF Outflows
BTC price has been in a strong sell-off in the past few weeks as Wall Street investors continued dumping its ETFs. Data shows that these funds have shed over $5.4 billion in the last four weeks. They now have a cumulative total net inflow of $53.94 billion and hold $75 billion in assets. At Bitcoin's peak, these funds held over $130 billion in assets.
American investors have mostly sold their Bitcoin ETFs and moved to the booming stock market. The Nasdaq 100 Index has jumped by over 20% this year, while the S&P 500 has soared by 10%. Top companies like Sandisk (NASDAQ:SNDK), Micron (NASDAQ:MU), and Intel (NASDAQ:INTC) have soared by triple digits this year.
There is also a likelihood that some investors have dumped their ETF holdings in anticipation of the upcoming SpaceX IPO. This IPO is rumored to have raised $150 billion from investors. Some of these funds have likely come from Bitcoin ETF sales.
Bitcoin also retreated after Michael Saylor's Strategy announced that it sold its coins for the first time in years. The sale was a big shocker, considering that the company was in a buying spree for years. It now holds 843,706 coins valued at over $53 billion. In an X post on Sunday, Saylor hinted that the company restarted its purchases last week.
The next important catalyst for the BTC price will be the upcoming US consumer inflation report on Wednesday. Economists predict that the headline CPI jumped to 4.2% in May, moving further away from the Fed's 2% target.
BTC Price Technicals Are Sending a Warning
The weekly chart shows that Bitcoin has been in a strong downtrend in the past few months. It is now sitting along an important support level, which coincides with the lowest point this year.
Bitcoin has moved below the 50% Fibonacci Retracement level. It is also close to form a death cross as the spread between the 50-week and 200-week weighted moving averages narrows. It is also forming a series of lower lows and lower highs.
Therefore, there is a likelihood that the ongoing rebound is a dead-cat bounce. A DCB is a temporary rebound that happens when an asset is in a strong downward trend. If this is correct, it means that the coin may drop to the next key support level at $50,000.
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