Bitcoin ETFs sell off $635 million: How low will Bitcoin go?

Is Bitcoin’s Key Support in Danger?

Bitcoin (BTC) is currently trading in a mid range around $79,700, showing a slight bullish variation of +1.3% over the last 24 hours. Despite this timid bounce, the digital asset remains under pressure. The massive outflow of $635 million from spot ETFs in a single day represents the largest capital flight since late January, a potentially bearish signal from institutional investors.

This capital hemorrhage comes at a critical technical moment. The price of Bitcoin recently suffered a violent rejection at its 200 day moving average (SMA 200), located around $82,500. This zone now acts as a formidable resistance. If selling pressure intensifies, the next safety net is found at the support of $75,000, which corresponds to the 50 day moving average.

Technical indicators, such as the RSI, are showing bearish divergences on high timeframes, raising the specter of a flush out of overleveraged long positions in the coming days.

This institutional panic also stems from the fact that the SP500 seems to be hitting a wall at $7,400. The fear of a crash has taken over and investors are now on the defensive.

How High Can the Price of Bitcoin (BTC) Go?

Faced with this uncertainty, two scenarios are emerging for the leading cryptocurrency. From an optimistic perspective, a deviation above the famous $82,500 resistance before a broader bearish reversal. This is notably the preferred scenario of trader Killa on X.

If the bulls regain control and turn this glass ceiling into support, Bitcoin could restart its bull run with a clear technical target: the $93,000 mark.

Conversely, the bearish scenario would gain momentum in the event of a confirmed breakdown below current levels. Renowned analyst Ali Martinez has highlighted this major risk on X. According to him, a failure to reclaim $82,500 could trigger a cascade of liquidations, sending the price plunging toward a test of the $75,000 support.

The daily chart indicates a liquidity order block between $77,800 and $74,500. A drop to this level would then be an excellent entry point for a long scalp on BTC. The top of the range at $79,500 is also a crucial level. A close below this level and the chances of a return to $76,000 to $75,000 are then much stronger. On the contrary, above this level, BTC targets $83,000 to $85,000 as its first resistance.

As explosive volatility is expected in the coming days, traders are closely monitoring ETF flows to anticipate the next move. Is this the right time to buy Bitcoin before another surge, or should we brace for a steeper dive?

What On Chain Data Tells Us

The IBIT ETF Open Interest chart shows us a strong bullish position from investors with a cluster of calls between $90,000 and $110,000. This zone is therefore a price magnet for the coming months. 

The Bitcoin Mean Reversion Index has moved back out of the bear market zone. Historically, this has always indicated that the bottom was in. The question is when the top of this bounce will occur. For now, the indexes are far from the red band, so the market still has room to grow. 

In other words, the gamma wall and the panic selling of ETFs could delay the rally in the coming days or weeks, but Bitcoin has every chance of reaching the $90,000 to $110,000 zone in the coming months. 

To achieve this, Bitcoin will need to hold $73,000, at the risk of plunging to $68,000 to $65,000 as the last line of defense before a new low.

Sources:

• Checkonchain
• TradingView
• Killa on X
• CoinDesk

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