Crypto market: time for breather and correction?

[Ben Graham]

Bitcoin has rebounded to $92,000, while Ethereum has managed to hold above $3,000. This has occurred against the backdrop of news that US exchange-traded Bitcoin ETF funds returned to a net inflow of funds on Wednesday, ending a five-day streak of outflows.

According to data from SoSoValue, Bitcoin funds reported a net inflow of $75.47 million yesterday, of which $60.61 million went to the IBIT BlackRock fund, and $53.84 million to the Grayscale Mini Bitcoin Trust. The inflow into IBIT followed a record net outflow of $523 million on Tuesday, marking the largest daily outflow since its launch.

This positive signal has breathed new life into the crypto market following a period of relative weakness, sparked by concerns about tightening monetary policy and the significant overvaluation of the market amid an AI bubble. The resumption of inflows into Bitcoin ETF funds indicates the first signs of a recovery in investor confidence toward the leading cryptocurrency.

However, it is essential to remember that the chances of a new wave of BTC sell-offs are currently much higher than those of a rise back to the $100,000 level. Maintaining vigilance and making well-rounded decisions based on a careful analysis of the current situation is crucial.

The report also mentioned that yesterday's net inflow was partially offset by two funds that reported net outflows. FBTC Fidelity experienced an outflow of $21.35 million, while HODL VanEck lost $17.63 million.

The five-day net outflow of funds from November 12 to 18 resulted in more than $2.26 billion exiting Bitcoin ETFs. This negative outflow coincided with an active downturn in the cryptocurrency market.

Meanwhile, the net outflow from Ethereum spot ETFs has continued for the seventh day, with $37.35 million leaving the funds.

Trading recommendations

As for the technical picture for Bitcoin, buyers are currently targeting a return to the level of $92,900, which opens a direct path to $95,900, and from there, it's just a short distance to $99,400. The furthest target will be the peak around $102,400; overcoming this level would signify attempts to return to a bull market. In the event of a Bitcoin decline, I expect buyers at the level of $89,200. A return of the trading instrument below this area could quickly drop BTC to around $86,500. The furthest target will be the area of $83,900.

Regarding the technical picture for Ethereum, a clear consolidation above the level of $3,068 opens a direct path to $3,193. The furthest target will be the peak around $3,317; breaching this level would indicate a strengthening of bullish market sentiment and renewed interest from buyers. In the event of a decline in Ethereum, I expect buyers at the level of $2,924. A return of the trading instrument below this area could quickly drop ETH to around $2,797. The furthest target will be the area of $2,662.

Chart indicators

• Red indicators represent support and resistance levels, where a slowdown or active price increase is expected.
• Green represents the 50-day moving average.
• Blue indicates the 100-day moving average.
• Light green signifies the 200-day moving average.

Crossovers or tests of the moving averages usually halt or set the market's momentum.

The material has been provided by InstaForex Company - www.instaforex.com