Bitcoin experienced a turbulent Tuesday as the price sank below $116k after hitting an all-time high on Monday. However, the market is currently in a recovery phase, with BTC adding 1% to its value in the last 24 hours to currently trade above $118k. Altcoins, including Ether, XRP, and Dogecoin, also recorded excellent gains in the last few hours as the total cryptocurrency market cap looks set to break above $4 trillion for the first time in history. Spot Bitcoin ETF inflow and possible rate cut push BTC above $118k Bitcoin, the leading cryptocurrency by market cap, is up 1% in the last 24 hours and now trades at $118,223. The positive performance came after BTC dropped to $115,627 on Tuesday. The ongoing recovery is fueled by growing institutional demand for Bitcoin products. Data obtained from SoSoValue revealed that U.S. spot bitcoin exchange-traded funds reported their ninth consecutive day of total net inflows on Tuesday, with $403 million moving into the funds. As usual, BlackRock’s IBIT led the gains, with net inflows of $416.35 million. In distant second is VanEck’s HODL reporting $19 million in positive flows while Grayscale’s Mini Bitcoin Trust and Bitwise’s BITB also recorded net inflows for the day. In addition to the institutional demand, yesterday’s CPI figures also fanned bullish sentiment across the broader cryptocurrency market. Core CPI rose just 0.1% month-over-month for the fifth straight time, signalling further disinflation. Traders are now predicting a September Fed rate cut following yesterday’s CPI data. Despite Bitcoin’s ongoing rally, analysts are still unsure of a breakout in the medium to long term. In an email, Andrejs Balans, risk manager, YouHodler (an EU-based fintech platform), pointed out that inflation in major economies remains persistently above target, prompting central banks to hold policy rates higher for longer. This tight monetary environment has limited liquidity across risk assets, including cryptocurrencies. Balans said: Bitcoin’s market has matured considerably, with improved liquidity and participation by professional trading firms. This evolution has reduced volatility compared to past cycles, a sign of a more resilient market, but also a factor that can dampen large speculative moves. Following significant gains this year, many long-term holders have realized profits, thereby adding to the market’s supply. Without sustained fresh demand, this selling pressure could keep prices range-bound rather than driving a decisive breakout. BTC eyes $120k resistance level The BTC/USD 4-hour chart is bullish and efficient thanks to the cryptocurrency’s rally over the last few days. The coin tapped the 4H Transactional Liquidity (TLQ) level at $116k on Tuesday, prompting a rally above $118k. The technical indicators suggest a sustained rally, which could push BTC towards the $120k resistance level in the near term. The MACD lines remain within the positive zone, while the RSI of 58 shows that the bulls are yet to relinquish control of the market. In the event of an extended rally, BTC could surge past its all-time high of $123k over the next few hours or days. On the downside, failure to build momentum above the Bollinger mid-band of $118,200 could see BTC retest the first major support level at $115k. The bears could retest the second major support at $112,500 if the bearish trend continues, with an important trendline liquidity within that region. The post Institutional demand and possible rate cut keep Bitcoin above $118k; check forecast appeared first on Invezz
