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Bitcoin Faces Resistance at $88,000 Amid Declining ETF Demand and Inflation Concerns
Bitcoin is encountering significant resistance around the $88,000 mark as exchange-traded funds (ETFs) experience net outflows and rising inflation in the United States impacts market sentiment. A report from blockchain analytics firm Glassnode highlights that the $80,000 to $81,500 range serves as a crucial support zone, while investors who acquired Bitcoin over the past two years are contributing to selling pressure above current price levels.
The report indicates that investors who purchased Bitcoin between six and twelve months ago have an average cost basis near $88,000, while those who bought between one and two years ago have a cost basis around $100,000. Both price points have previously rejected Bitcoin rallies this year, with significant declines following attempts to breach these levels. Glassnode emphasizes that Bitcoin must reclaim the $88,000 threshold to alleviate selling pressure from these investors.
Despite the challenges, Bitcoin is maintaining key support levels, with the average cost basis of US spot Bitcoin ETFs near $81,500. Significant buying orders are noted around the $80,000 mark on the Binance exchange. However, a sustained recovery will require stronger demand in the spot market, especially after recent ETF inflows reversed, leading to approximately $760 million in net outflows since October 7.
The report also reflects on the broader economic context, noting that a stronger-than-expected inflation report from the US has heightened concerns about potential interest rate hikes by the Federal Reserve. With the next monetary policy decision scheduled for October 28, market participants are closely monitoring these developments as they could influence Bitcoin's trajectory in the coming weeks.
Source: KLEA News