• Bitcoin price breaks above the daily resistance level at $56,000, hinting at some modest signs of recovery after last week’s sell-off.
  • US spot Bitcoin ETFs recorded a mild inflow of $28.60 million on Monday, breaking a streak of outflows that was underway since August 27.
  • On-chain data shows a sign of recovery, with BTC’s long-to-short ratio above one and rising holdings of stablecoins on exchanges.

 

Bitcoin (BTC) trades just above $57,000 on Tuesday after gaining almost 4% on Monday,  buoyed by mild ETF inflows, increasing whale buying activity during price dips, a long-to-short ratio above one, and increasing stablecoin holdings on exchanges.

 

Daily digest market movers: Some signs of recovery

  • US spot Bitcoin ETFs recorded a mild inflow of $28.60 million on Monday, breaking their long outflow streak that started on August 27, according to CoinGlass data. This is a sign of slightly improving market sentiment. However, it is relatively minor compared to the $48.67 billion in total Bitcoin reserves held by the 11 US spot Bitcoin ETFs and taking into account the significant outflows that Bitcoin ETFs have registered since the beginning of the month. 

Bitcoin Spot ETF Net Inflow chart

Bitcoin Spot ETF Net Inflow chart

Bitcoin Spot ETF Net Inflow chart

  • Lookonchain data shows that a whale created a new wallet and withdrew 300 BTC, worth $17.19 million, from Binance on Monday. 

Additionally, from September 1 to September 3, some other whales bought 2,814 BTC worth $157.3 million from Binance, with an average price of $55,887. This indicates that large investors are buying to try to get a profit from the recent BTC price dips.

  • Moreover, Coinglass’s Binance Bitcoin’s long-to-short ratio is at 1.69, its highest since August 27, meaning more traders anticipate the asset’s price to rise.

Binance Bitcoin’s long-to-short ratio chart

Binance Bitcoin’s long-to-short ratio chart

  • CryptoQuant data shows that the holdings of stablecoins are increasing on exchanges. When stablecoins flow into exchanges, it is generally interpreted as funds waiting to buy, which could have positive effects on prices. However, increasing holdings does not necessarily mean the price will rise. The value of stablecoins holdings on exchanges has risen from $20.82 billion in early August to $24.99 billion on Monday, signaling investors are waiting to buy.

Stablecoins holding on all exchanges chart

Stablecoins holding on all exchanges chart

 

Technical analysis: BTC breaks above $56,000 

Bitcoin price retested and found support around the $54,000 level on Saturday, bouncing 5.5% the next two days. It broke and closed above the $56,022 daily resistance level on Monday. At the time of writing on Tuesday, it trades slightly above $57,094.

If the $56,022 continues to hold as support, BTC could rise 4% from its current trading level to retest its 50% price retracement level at $59,529 (drawn from a high in late July to a low in early August).

The Relative Strength Index (RSI) on the daily chart is hovering around its neutral level of 50, indicating indecisiveness among investors. The Awesome Oscillator (AO) still trades well below its neutral level of zero. Both indicators should trade above their respective neutral levels for any upcoming recovery rally to be sustained.

BTC/USDT daily chart

BTC/USDT daily chart

This bullish thesis will be invalidated if Bitcoin price closes below the $54,000 support level. In this scenario, BTC could decline by an additional 7% and retest the next daily support at $49,917.

Bitcoin, altcoins, stablecoins FAQs

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin (BTC) edges slightly down on Thursday and trades at around $74,900 after hitting a new all-time high (ATH) of $76,400 on Wednesday, buoyed by the victory of the crypto-friendly candidate Donald Trump in the US presidential election.

More Bitcoin News
Ethereum price jump spurs most significant ETF inflows in six weeks

Ethereum price jump spurs most significant ETF inflows in six weeks

​After a positive momentum in crypto markets following the outcome of the US presidential election, spot Ether exchange-traded funds (ETFs) in the United States saw their highest inflows in six weeks.

More Ethereum News
Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

The prices of top trending meme coins Pepe (PEPE), Bonk (BONK) and FLOKI (FLOKI) experienced double-digit gains following Trump’s victory on Wednesday. The technical outlook suggests that the three meme coins hover around key levels, and the breakout could push these coins higher.

More Crypto News
SUI hits new all-time high fueled by Trump election win

SUI hits new all-time high fueled by Trump election win

Sui (SUI) edges down on Thursday and trades at around $2.24 after hitting a new all-time high (ATH) of $2.38 earlier in the day, buoyed by the victory of a crypto-friendly candidate, Donald Trump, in the US presidential election.

More SUI News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP