Bitcoin Rebounds After 3% Drop as Investors Pour $317M Into BlackRock’s IBIT Fund
On October 23, investors in BlackRock’s IBIT fund seized the opportunity presented by Bitcoin’s more than 3% decline, contributing a notable $317 million in inflows as the cryptocurrency tested a critical support level near $65,000.
Bitcoin faced significant downward pressure on the day, dropping 3.3% to close at $66,649—an abrupt reversal from the previous session’s modest 0.12% gain. The cryptocurrency tested buying interest at $65,000, with an intraday low of $65,161, before managing to recover above the $66,000 mark.
The broader cryptocurrency market mirrored BTC’s decline, losing 1.45% to bring the total market capitalization down to $2.242 trillion.
This pullback is largely attributed to shifting investor sentiment amidst concerns over the upcoming U.S. Presidential Election and the Federal Reserve’s interest rate path. Risk assets, including Bitcoin, faced selling pressure as investors braced for tighter monetary policy. The Nasdaq Composite Index also fell 1.60%, while U.S. 10-year Treasury yields surged to 4.26%, the highest since July, signaling strong economic conditions and dampening expectations of multiple rate cuts from the Fed in the final quarter of 2024.
U.S. Presidential Election and Market Impact
With the 2024 US Presidential Election drawing near, investor uncertainty is weighing on the markets. Recent polls show Vice President Kamala Harris holding a slim 1.7-point lead over former President Donald Trump, who has closed the gap significantly from a 3.7-point deficit in earlier surveys.
Despite Harris’s slight edge, betting markets on platforms like Polymarket give Trump a stronger chance of winning, assigning him a 59.7% probability compared to Harris’s 40.4%.
A Trump victory is anticipated to bring inflationary pressures, potentially prompting a more hawkish stance from the Federal Reserve. While this could reduce demand for riskier assets like Bitcoin, Trump’s generally pro-crypto policies might offer longer-term support for the digital currency.
Bitcoin ETFs Boost Recovery
Despite macroeconomic headwinds, BTC managed to rebound from its $65,000 support level, aided by renewed inflows into spot Bitcoin ETFs, particularly BlackRock’s IBIT fund. After a prior day of outflows amounting to $79.1 million—driven by concerns that Bitcoin’s rally was losing steam—investors showed renewed confidence.
On October 23, 12 spot Bitcoin ETFs recorded total net inflows of $192.31 million, with BlackRock’s IBIT contributing the largest portion, at $317.47 million. This marked the fourth time in six trading days that IBIT had attracted over $300 million in inflows, bringing its total net inflows to more than $23 billion as of October 21.
Grayscale’s Bitcoin Trust also added to the positive sentiment, recording $4.71 million in inflows. However, other ETF products like ARKB, BITB, and VanEck saw collective outflows of $129.8 million, reflecting cautiousness among some market participants.
Bitcoin’s Technical Outlook
Despite the day’s price drop, BTC remains above key technical levels, including its 50-day and 200-day exponential moving averages, signaling that bullish momentum is still in play.
A breakout above the $69,000 resistance level, or the October 21 high of $69,402, could pave the way for a push toward the psychological $70,000 mark. If Bitcoin can surpass $70,000, bulls may set their sights on the all-time high of $73,808.
On the downside, a fall below $66,500 could rekindle bearish sentiment, bringing the critical $65,000 support level back into play. Should Bitcoin break below $65,000, it may trigger a deeper correction, with $64,000 serving as the next key support level.
With Bitcoin’s 14-day Relative Strength Index (RSI) reading at 60, the cryptocurrency has room to rally toward $70,000 before hitting overbought conditions.
As of press time, BTC was up 0.5%, trading at $67,345.
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