Bitcoin (BTC) traded slightly higher at around $63,500 on Monday, recovering from a modest correction recorded during the previous week. Improving risk sentiment is underpinning the mild rebound, but institutional demand remains cautious after US spot Bitcoin exchange-traded funds (ETFs) posted another week of outflows.

The cryptocurrency has moved broadly sideways since mid-July, confined to a narrow price range while volatility has fallen to unusually low levels. Analysts caution that this period of calm may be nearing its end, and that the resulting sharp move could determine BTC's next short-term trend.

Spot Bitcoin ETFs record $389.71 million in weekly outflows

Institutional demand weakened last week as US spot Bitcoin ETFs registered combined net outflows of $389.71 million, according to SoSoValue. The negative flows indicate that institutional investors reduced their exposure through regulated Bitcoin investment products. Since launching in January 2024, these funds have grown into one of the main vehicles for institutional Bitcoin exposure, which is why their weekly flows are tracked as a real-time gauge of demand from regulated market participants.

If outflows continue or accelerate this week, they could increase selling pressure and push BTC toward the lower boundary of its consolidation range. A return to net inflows, by contrast, could help Bitcoin stabilize and provide the demand needed for another attempt at breaking through nearby resistance.

A Monday report from 10x Research highlighted the sharp decline in cryptocurrency trading volumes from their post-inauguration and October flash-crash peaks. Bitcoin is now compressed within its narrowest trading range in several months. The research firm noted that similar periods of extremely low volatility have historically been temporary and have often preceded substantial price movements.

The compression indicates that buyers and sellers have reached a temporary balance. Once either side gains control, the resulting breakout could produce a rapid increase in volatility.

Bitcoin options data also points to changing expectations among market participants. Implied volatility—the expected magnitude of future price swings embedded in options prices—has declined to historically subdued levels, indicating that options traders currently expect limited price fluctuations. This calm persists despite several cautious market signals, including spot ETF outflows, continued stablecoin withdrawals (a signal worth noting because stablecoins such as USDT and USDC provide much of the trading liquidity on cryptocurrency exchanges), and Strategy—formerly known as MicroStrategy and the largest publicly listed corporate holder of Bitcoin—acting as a net seller for four consecutive weeks. Together, these factors suggest that Bitcoin may be approaching a volatility expansion, although the direction of any breakout remains uncertain. A sustained move above resistance could attract momentum buyers, while a breakdown below support could trigger renewed selling and force leveraged positions out of the market.

Bitcoin remains confined between $62,300 and $66,500

Bitcoin maintains a mildly bearish technical bias as it trades below important Exponential Moving Averages (EMAs), which give greater weight to recent prices and are widely used to read trend direction. BTC has consolidated between the horizontal support level at $62,300 and resistance at $66,500 since mid-July, and traded around $63,300–$63,500 on Monday after successfully defending the lower boundary during the previous week. The range has become increasingly tight, reflecting reduced volatility and limited directional conviction.

Daily momentum indicators remain slightly bearish. The Moving Average Convergence Divergence (MACD) histogram is marginally negative, indicating that downside momentum has not completely faded, while the Relative Strength Index (RSI) stands near 45, below its neutral midpoint of 50—a reading that suggests sellers retain a modest advantage despite Bitcoin's stabilization above $63,000. Neither indicator currently signals extreme bearish conditions, but both show that BTC lacks the momentum required for a convincing upside breakout.

The horizontal floor at $62,300 remains Bitcoin's most important immediate support level. A daily close below this area would confirm a breakdown from the consolidation range and could extend the decline toward the yearly low at $57,800, established on July 1.

On the upside, Bitcoin faces initial resistance at the 50-day EMA of $64,313; a daily close above this average would ease some of the immediate selling pressure. The next major obstacle sits between the 100-day EMA at $66,392 and the horizontal resistance level at $66,500. As long as Bitcoin remains below its 50-day EMA and the $66,392–$66,500 resistance cluster, rallies may continue to attract sellers. A sustained recovery above both moving averages would improve the technical outlook and strengthen the case for a bullish breakout.

Source: CoinJournal