 ▲ Bitcoin and the U.S. dollar © |
Bitcoin (BTC) has reclaimed the $70,000 level, but with ETF outflows and extreme fear sentiment converging, market attention is focused on whether the short-term rebound can be sustained.
According to investment outlet FXEmpire on February 15 (local time), Bitcoin rebounded from around $65,000 to recover $70,000, preparing to snap a three-week losing streak. The January U.S. Consumer Price Index (CPI) rose 2.4% year-over-year, below the market expectation of 2.5%, while core inflation also slowed to 2.5%, boosting expectations for a Federal Reserve rate cut in June. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability of a June rate cut increased from 64.6% to 68.6%.
The U.S. spot Bitcoin ETF market also recorded net inflows of $15.1 million on February 13, breaking a two-day streak of outflows. However, on a weekly basis, net outflows continued for four consecutive weeks, with iShares Bitcoin Trust (IBIT) posting $234.8 million in outflows, Fidelity Wise Origin Bitcoin Fund (FBTC) seeing $124.7 million withdrawn, and Grayscale Bitcoin Trust (GBTC) recording $77 million in net outflows. Since the beginning of the year, Bitcoin’s returns have declined by 19.74%, and spot ETF fund flows are supporting a short-term bearish outlook.
Policy variables are also a key factor. Growing expectations in the U.S. Senate for the passage of the cryptocurrency market structure bill, known as the Clarity Act, are supporting mid-term bullish sentiment. However, warnings have emerged that if the Bank of Japan (BoJ) signals the possibility of raising its neutral rate to the 1.5%–2% range, a renewed unwinding of the yen carry trade could heighten volatility in risk assets. In such a scenario, Bitcoin could retest $60,000 and potentially open the door to $49,351, the low recorded in August 2024.
Sentiment indicators remain subdued. The Bitcoin Fear & Greed Index stands at 8, lingering in the extreme fear zone. Although such levels are typically interpreted as a precursor to price rebounds, short-term direction is likely to depend on additional economic data such as U.S. Personal Consumption Expenditures (PCE) inflation, services PMI, fourth-quarter GDP, and the minutes of the Federal Open Market Committee (FOMC). If the disinflation trend continues, expectations for increased liquidity could strengthen. Conversely, if data come in stronger than expected, rate-cut expectations may retreat swiftly.
Technically, despite reclaiming $70,000, Bitcoin remains below the 50-day and 200-day exponential moving averages (EMAs), maintaining a bearish structure. A breakout above $75,000 would target $80,000 and the 50-day EMA next, and a subsequent move above the 200-day EMA would bring the psychological resistance level of $100,000 into view. On the downside, a drop back below $60,000 raises the possibility of revisiting the $49,351 low. The outlet presented a mid- to long-term price target of $123,731 over the next six to twelve months, while advising a cautious approach in the short term.
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