Where we are: Bitcoin currently trades at $77,693, down $708 or 0.9% on the day, trading within a $77,494-$79,497 range. BTC is underperforming Ethereum which is down 2.08%. Bitcoin is finding support ahead of the $77,000 level after a strong run. This consolidation is occurring as the DXY weakens to 98.14 and US 10Y yields nudge slightly higher to 4.323%.
What’s driving it: The near-term BTC price action is being driven by ETF flows, and sentiment surrounding the upcoming Fed meeting and potential peace talks. Wire reports suggest that Bitcoin ETFs are extending their longest win streak since September, though spot demand lags. This is occuring as broader risk sentiment remains cautiously optimistic, as evidenced by gains in the Nikkei (+1.18%), DAX (+0.28%), and US futures. The crowded long positioning also presents squeeze risk if positive catalysts fail to materialize.
- Yahoo Finance Headline: Bitcoin ETFs Extend Longest Win Streak Since September, But Spot Demand Lags
- US 10Y Real Yield remains elevated at 1.92%.
- CFTC data shows net non-commercial Bitcoin positioning at +2,071 contracts, still a crowded long at the 90th percentile.
NY session focus: Watch for reaction to any pre-Fed headlines regarding potential pivots or peace talk progress. Key levels to watch are $77,000 as initial support, and $79,500 as resistance. A break below $77,000 could trigger a faster move down to $75,000 given the crowded longs. We still think the trade in BTC is buying dips with the bigger picture backdrop for adoption still bullish, but traders need to be mindful of that crowded long position and potential for a squeeze. The pain trade for Bitcoin is a hawkish surprise from the Fed coupled with stalled peace talks.