Bitcoin Key Indicator Turns Bullish As Spot ETFs Record $2.1 Billion Weekly Inflow: New ATH Imminent?

A crucial momentum indicator for Bitcoin (BTC) has turned positive, as the premier cryptocurrency attracted more than $2.1 billion in spot exchange-traded fund (ETF) weekly net inflows.

New Bitcoin All-Time-High In Sight?

Bitcoin could be heading to a new all-time high (ATH) price, as the moving average convergence divergence (MACD) histogram has turned positive on the weekly chart for the first time since April 2024.

For the uninitiated, the MACD histogram is a crucial momentum indicator widely used to gauge the future price of the underlying asset. The indicator helps traders identify shifts in momentum, with positive values suggesting upward momentum and negative values indicating downward momentum. 

The MACD is calculated by subtracting Bitcoin’s 26-week moving average from its 12-week average. Further, a signal line is created by averaging the MACD over nine weeks, and the difference between the MACD and the signal line is displayed as a histogram. 

Notably, the MACD histogram’s height reflects the trend’s strength, aiding in determining potential buy or sell points in the market. In the chart below, the MACD is sprouting after remaining in the red since April 2024.

In BTC’s context, the recent positive change in the MACD histogram indicates a growing buying interest in the market. It suggests that Bitcoin’s short-term price trend is gaining strength relative to its longer-term trend, signaling potential upward movement beyond its ATH value of $73,737 in March 2024.

The MACD turning bullish aligns well with other positive macroeconomic developments, including the US Federal Reserve’s (Fed) decision to slash key interest rates to stimulate business spending. Crypto analysts predict that further cuts in interest rates will give BTC the required ammunition to rally in Q4 2024.

Spot BTC ETFs Post $2.1 Billion In Weekly Net Inflows

Another factor painting a bullish picture for the leading digital asset is the return of strong positive weekly inflows into US-based spot BTC ETFs.

According to data from SoSoValue, total weekly net inflows in spot BTC ETFs for the week ending October 18 were $2.13 billion. This marks the highest total weekly net inflows since $2.6 billion in March 2024, when BTC made a new ATH of more than $73,000. 

As of October 18, the cumulative net inflow of US spot BTC ETFs stands at $20.94 billion, with total net assets of $66 billion, worth almost 4.9% of Bitcoin’s total market cap.

Since their approval by the US Securities and Exchange Commission (SEC) earlier this year, many institutional investors have gravitated toward Bitcoin ETFs.

Wall Street titan Morgan Stanley recently revealed it had $272 million in BTC ETF holdings, signifying about 2% of their total assets under management.

However, declining interest in Bitcoin – evident through low search volumes for Bitcoin keywords on Google – suggests that retail participants are still reluctant to invest in BTC due to its perceived volatility. BTC trades at $68,048 at press time, down 1.2% in the past 24 hours.