Bitcoin eyes $61,500 after bouncing back from key support test

Key Takeaways

• Bitcoin successfully tested $58,000 support, potentially targeting $60,500-$61,500 range.
• US spot Bitcoin ETFs experienced $127 million in outflows following the price drop.

Bitcoin (BTC) is successfully testing weekly key support despite quickly crashing to the $58,000 price level on Aug. 27. According to the trader identified as Rekt Capital, a weekly close above $58,447.12 could confirm BTC is back into an important price channel, potentially gearing it to reach the area between $60,500 and $61,500 in the short term.

On the daily timeframe, the trader added that the crash also served as an opportunity for Bitcoin to successfully test the resistance of its previous downtrend channel as support.

Notably, Rekt Capital explained that a successful retest of this daily support would fully confirm the breakout and precede upside continuation, which ended up happening. 

As a result, Bitcoin could be gearing up to fill a new CME gap located between $60,500 and $61,500, as the trader underscored that BTC filled every gap registered in the past six months.

CME gaps are the deviations between the closing and opening price of Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), hence the name. Usually, BTC price moves to cover the discrepancies between the spot and futures markets.

Sudden but regular crash 

Yesterday’s crash wasn’t related to any major development in crypto or the macroeconomy. Aurelie Barthere, Principal research analyst at Nansen, shared with Crypto Briefing that the market has been choppy since March, and the flash dump is just a regular movement after Bitcoin got rejected at the $62,000 resistance.

“This could explain the large red price candle for BTC yesterday,” she added.

Despite being a regular movement, the sudden impact caused $110 million in liquidations within an hour, according to Coinglass’ data.

Spot Bitcoin exchange-traded funds (ETF) in the US also had a tough day, with $127 million in registered outflows, as Farside Investors’ data shows. Yet, unlike the usual fleeing capital from Grayscale’s GBTC, ARK 21Shares’ ARKB registered the most negative flows as $102 million left the fund yesterday.

Notably, the flows witnessed yesterday heavily contrast with the nearly $203 million directed to US-traded Bitcoin ETFs on Monday, majorly driven by BlackRock’s IBIT capturing over $224 million in inflows.