After soaring above $90,000 on January 28, Bitcoin traded between $89,300 and $89,600, with its market capitalization peaking at $1.78 trillion.
Conflicting ETF trends
Following reports that Bitcoin remittances to Binance, the world’s largest cryptocurrency exchange, have plummeted to an average of 5,700 per month, Bitcoin briefly soared above the milestone of $90,000 on January 28th. $BTC. This is the lowest foreign exchange inflow in four years. Following an intraday low of $87,000, the asset immediately faced resistance, but the rally marked a 2% gain.
After breaking above $90,000, Bitcoin retreated, fluctuating between $89,300 and $89,600, with daily trading volume remaining relatively subdued at less than $50 billion. Bitcoin’s market cap swelled by about $40 billion at its intraday peak, reaching a total valuation of $1.78 trillion by 1 p.m. ET.
This price recovery occurred even as interest in spot Bitcoin exchange-traded funds cooled. The sector slipped into the red after net inflows were only $6.86 million on January 26. According to the data, net outflows were $147.37 million, with BlackRock’s IBIT leading the outflows with redemptions of $102.81 million. In recent weeks, these institutional outflows have typically served as a leading indicator of a downward trend in prices, so today’s resilience is particularly noteworthy.
read more: Bitcoin stalls at $89,000 as consolidation continues: Will the ‘February Factor’ break the deadlock?
Structural transformation for long-term holding
The positive market reaction is largely due to the collapse of Binance transfers, which have more than halved from the historical average of 12,000 transfers. $BTC. On-chain analysis shows that a decline in exchange deposits typically suggests investors are moving assets into cold storage, indicating high conviction and a preference for long-term holding over immediate sales.
What makes this supply crunch so important is its timing. Bitcoin is currently recovering from a 30% drop since its all-time high of just over $126,000 on October 6th. Analysts suggest this is not just a flash in the pan. According to social media commentator Dirkforst, this trend is gaining ground in the market.
“In recent months, the number of new arrivals has remained consistently below the historical average of 12,000.” $BTC“This suggests that the current dynamic is becoming more structural than temporary,” Dirkforst said of the X Platform, formerly known as Twitter.
As of January 28, Bitcoin’s technical situation shows a tug of war between short-term bearish exhaustion and long-term structural strength. While “Binance Undersupply” provides a fundamental lower bound, the chart suggests that $90,000 remains a significant psychological and technical barrier.
Technical indicators: tug of war
Bitcoin is currently trading slightly below its 50-day and 200-day exponential moving averages on several time frames. On daily charts, price movements are “pinched in.” While the long-term bullish structure remains intact above the $84,000 to $87,000 support zone, the inability to close decisively above the $91,400 moving average will ensure that the bears remain in control of the near-term trend.
Traders are keeping an eye on whether the price recovers to the $95,000 level, which would signal a move to a “strong buy” regime. The Relative Strength Index is currently hovering around 64.5, in neutral to bullish territory.
Overall, indicators suggest that Bitcoin is in a consolidation phase. A crash has been avoided due to low foreign exchange inflows, but a “moonshot” has been avoided due to lack of active ETF purchases. The market is now waiting for a trigger (perhaps an upcoming Federal Reserve policy decision) to determine which way the wedge will bend.
Frequently asked questions ❓
- Why did Bitcoin soar above $90,000? The rally was fueled by a sharp drop in inflows to Binance to a four-year low.
- What happened after the $90,000 breakout? Bitcoin retreated, trading between $89,300 and $89,600 on subdued volume.
- How are ETFs influencing Bitcoin trends? The Spot Bitcoin ETF recorded net outflows of $147 million, driven by BlackRock’s IBIT redemption.
- What levels are traders currently focused on? Support holds between $84,000 and $87,000, but a return to $95,000 could generate a strong buy signal.
