The cryptocurrency market has slightly recovered following its bearish performance over the weekend.
Bitcoin, the leading cryptocurrency by market cap, is up by nearly 3% in the last 24 hours and is now trading above $78k.
It could rally higher in the near term as institutional inflows into ETFs resume.
US spot Bitcoin ETFs posted $562 million in daily inflows
Bitcoin is trading above $78k on Tuesday after adding 2.7% to its value in the last 24 hours.
The bullish recovery comes as spot bitcoin ETFs in the US reported $561.9 million in net inflows on Monday.
The inflows ended a four-day streak of outflows and marked the largest daily intake since Jan. 14.
According to the data obtained from SoSoValue, Fidelity’s FBTC led the inflows on Monday with $153.4 million, followed by BlackRock IBIT’s inflows of $142 million.
Furthermore, Bitwise’s BITB saw $96.5 million in net inflows, while funds from Grayscale, Ark & 21Shares, VanEck, Invesco, and WisdomTree also posted inflows.
Analysts are optimistic that Bitcoin’s support is forming around the $70k region. If the support holds, BTC’s price could rally higher in the near to medium term.
In an email to Invezz, Nick Forster, Founder at the onchain options platform, Derive.xyz, stated that based on recent flow and open interest, BTC support appears to be forming around the $70K level.
Over the past 24 hours, there has been heavy put buying across the $78K-$74K strikes for the 27 February expiry.
“Short-term fear is dominating market psychology. Volatility term structure has flipped firmly into backwardation, with near-dated volatility trading well above longer-dated levels. This reflects acute uncertainty in the immediate term,” Forster added.
The analyst added that broader macro concerns are compounding crypto’s weakness.
Fears around an overheated tech sector, highlighted by Microsoft’s 10% drop last week, and lingering unease over AI-driven exuberance are weighing heavily on high-beta assets.
These concerns are further amplified by scrutiny around highly leveraged DATs such as Bitmine and MSTR, reinforcing fears that the market may be entering a prolonged risk-off phase.
Bitcoin price forecast: is Bitcoin heading towards $80K?
The BTC/USD 4-hour chart remains bearish as Bitcoin’s weekly chart closed below the 200-week Exponential Moving Average (EMA) at $85,836. At press time, BTC is trading at $78,370.
In the last three weeks, Bitcoin has lost nearly 18% of its value, but the $74k support level could hold in the near term.
If the recovery continues, BTC could be heading towards the nearest resistance and Inducement Liquidity (ILQ) level at $82,033.
An extended bullish performance could allow Bitcoin to reclaim its Friday high of $84,600.
However, if the market correction persists, Bitcoin could retest the April 2025 low of $74,508.
An extended bearish scenario would bring the weekly support level of $71,280 into focus.
The Relative Strength Index (RSI) on the 4-hour chart is at 39, outside the oversold region, indicating that the bearish momentum is fading in the near term.
Furthermore, the Moving Average Convergence Divergence (MACD) indicator on the same chart is heading towards a neutral crossover, further supporting the current recovery outlook.
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