Bitcoin has seen a resurgence towards US$83,000, buoyed by renewed interest from institutional investors and an improved appetite for risk following a turbulent trading period lasting several weeks.
The leading cryptocurrency was last noted trading at approximately US$82,967, reflecting a rise of about 1.3% within the session, fluctuating between US$81,186 and US$83,245.
After recently testing the US$80,000 to US$81,000 range, Bitcoin has managed to recover but is still below the US$85,000 threshold that was achieved earlier this month.
This upward movement aligns with a significant boost in inflows for US spot Bitcoin exchange-traded funds (ETFs), although high oil prices and Treasury yields continue to pose challenges for a stronger breakout.
Revival in Bitcoin ETF purchases
Recent data indicates that US spot Bitcoin ETFs garnered US$526.7 million in the latest reporting period, marking the highest net inflow seen in the past month.
BlackRock’s iShares Bitcoin Trust represented US$665.2 million of these purchases, signifying the largest daily inflow in over a year.
However, this was partially countered by withdrawals from Fidelity and Grayscale products, highlighting that institutional interest is heavily biased towards BlackRock’s vehicle.
This turnaround is noteworthy after Bitcoin ETFs experienced a series of substantial withdrawals throughout October.
Sustained buying patterns would offer vital support in the US$80,000 to US$83,000 area, which has become the primary battleground for the market in the short term.
Oil prices and yields remain challenges
The overall economic conditions aren’t very favorable.
Currently, the US 10-year Treasury yield is approximately 5.1%, offering government bonds exceptionally high returns compared to non-yielding investments like Bitcoin.
Brent crude prices have been hovering around US$110 a barrel, amid ongoing tensions in the Middle East, leading to concerns that rising energy costs may sustain higher global inflation.
This situation could hinder the Federal Reserve’s ability to lower interest rates.
Markets currently project a low chance of an interest rate hike during the Fed’s meeting in October, yet uncertainty regarding future policies remains prevalent.
Bitcoin has shown increasing sensitivity to these expectations, often strengthening as bond yields decrease and liquidity conditions become more favorable.
Ethereum trails behind Bitcoin
Ethereum was reported trading at around US$2,448, reflecting an increase of approximately 1%-2% over the past 24 hours but still lower compared to the previous week and month.
The inflow of institutional capital remains a significant weakness for Ether.
In the latest completed session, US spot Ethereum ETFs experienced approximately US$103 million in withdrawals, extending a streak that has seen over US$300 million exit the funds since mid-October.