Bitcoin Under Pressure

It’s been a bad start to the month for crypto bulls with Bitcoin prices remaining heavily under pressure. The futures market has slumped more than 6% this week, gapping lower at the open today, as uncertainty around the Iran war and a more hawkish Fed outlook continue to drive investors out of the crypto asset. ETF outflows have soared in recent weeks with the latest industry revealing record outflows of more than $3 billion in the last fortnight. Monday marked the 11th straight day of outflows with just under $3.5 billion having left the market. BlackRock’s IBIT fund has seen the largest exodus of capital around $440 million.

Iran War & Fed

Looking ahead, BTC looks vulnerable to further downside amidst a lack of clarity on the Middle East peace process. Iran announced this week that it was stepping back from peace negotiations unless Lebanon and Gaza are included in any peace deal. This comes amidst heavy fighting in Lebanon after fresh attacks from Israel. However, Trump said overnight that peace talks have continued with Iran and are progressing well. For now, traders are unsure what to believe but without any concrete signs of progress, BTC should continue lower. On Friday we then receive the latest US labour market report. With Fed expectations having turned more hawkish recently, any strength in that data should see USD lifting again putting greater pressure on BTC near-term.

Technical Views

BTC

With another 6% fall this week so far already, BTC is now down around 16% from the May highs. Price has broken below the bull channel signalling a potential return to YTD lows, currently testing the $69,605 level. A break here will turn focus to $65,380 next.