Key Points
- Bitcoin rebounds nearly 6% from its October lows
- Spot Bitcoin ETF attracts $550 million in new capital inflows
- BTC faces main resistance between $85,000 and $87,500
Bitcoin once approached $84,800, rebounding by about 6% from its low of around $79,800 on October 15. This rebound came after several difficult trading days, during which stronger inflation data, rising interest rate expectations, and pressure on tech stocks all contributed to dragging down digital assets.
The latest increase coincides with a clear rebound in demand for ETF, however analysts remind that Bitcoin still faces significant resistance before it can form another round of sustained upward movement.
Bitcoin ETF attracted $550 million in funds after a recent sell-off
Institutional buying is one of the clearest explanations for the improvement in Bitcoin's trend.
According to the ETF data from Farside Investors, US spot Bitcoin funds attracted approximately $526.7 million in inflows on October 19th, and then another $23.2 million on October 20th. The total net inflows over these two days approached $550 million.
BlackRock’s iShares and Bitcoin Trust dominated trading on Monday, attracting $665.2 million in capital inflows, and the following day they recorded another $29.9 million in inflows.
This round of buying signals a reversal from the previous outflow of funds for ETF, which included a net outflow of $484.9 million on October 7th.
However, the capital inflow on Tuesday was significantly lower than that on Monday, indicating that despite the rebound in Bitcoin, institutional demand remains unbalanced.
This difference is important because the capital inflow into BlackRock ETF can support the underlying demand, but it does not guarantee that prices will rise immediately.
Why $85,000 Could Determine the Next Move of Bitcoin
The rebound of Bitcoin has pushed this cryptocurrency into an important technical resistance zone.
Glassnode pointed out in the market analysis on October 21 that there is a clear selling pressure between approximately $85,000 and $87,500, and the investor cost base overlaps with this clearing concentration area.
The study also found that compared to the peak in September, the speed of profit-taking has slowed down, which may reduce short-term selling pressure.
If it can remain above $85,000, $87,500 will become the focus of attention, followed by the psychological barrier of $90,000. However, these are all conditional technical scenarios and are not guaranteed to happen.
If it is unable to break through the resistance, Bitcoin may fall back to around $82,000, and after the recent market correction, $80,000 remains an important downward reference point.
The Fed's decision remains the main risk
The rebound in Bitcoin also occurred before the Federal Reserve's interest rate decision on October 28th, an event that could affect the demand for risk-sensitive assets.
Recent concerns about inflation have once again raised market expectations for tighter monetary policies, which contributed to the previous decline in Bitcoin.
Higher yields on U.S. Treasury bonds will make interest-bearing investments relatively more attractive, which may weaken the demand for cryptocurrencies that do not offer contractual returns.
Bitcoin has already recovered most of its losses from last week, but the next challenge is whether strong institutional buying will be able to break through the resistance around $85,000 in the face of ongoing uncertainty in monetary policy.
