Bitcoin hovered near $71,550 after technical indicators on the daily chart pointed to a possible bullish continuation, drawing attention ahead of an anticipated US inflation data release. The cryptocurrency‘s price action comes as institutional activity surges and significant outflows from exchanges suggest a shift in investor sentiment.
ETF activity and technical outlook point to bullish potential
In recent days, Bitcoin carved out a cup and handle formation on its daily price chart. This technical pattern, widely known among traders, is often interpreted as a sign of continued upside if confirmed by a breakout. During the latest pullback, selling volume fell short compared to the previous recovery rally, a behavior typical for this chart formation and taken as a sign that selling interest is declining.
Institutional flows offered additional signals. Weekly inflows into Bitcoin exchange-traded funds climbed sharply, rising from just over $22 million to more than $312 million by early April. The influx coincided with Morgan Stanley’s plans to launch the MSBT spot Bitcoin ETF with a 0.14% expense ratio, positioning it as one of the lowest-cost spot BTC products in the US market. Morgan Stanley operates as a leading global financial services firm, providing a range of investment banking, securities, and asset management services.
Despite the optimism around ETF inflows, analysts note that activity in these vehicles does not always perfectly mirror sentiment on spot exchanges. However, the scale of recent ETF demand has become hard to overlook when evaluating Bitcoin’s broader momentum.
Price action remains sensitive to macroeconomic triggers. With the March US Consumer Price Index (CPI) report expected to show inflation rising to 3.3% year over year, digital assets are facing renewed questions over their perceived hedge properties. How Bitcoin responds to the data could influence both short-term sentiment and future technical setups.
Exchange outflows and key price levels come into focus
Spot market data reflected growing accumulation as Bitcoin net outflows from exchanges accelerated, moving from minus 30,727 BTC to minus 37,472 BTC within a day. This substantial withdrawal suggested that holders were moving coins off platforms, often viewed as an indication of longer-term conviction and potentially reduced immediate selling pressure.
With ETF inflows rising and exchange reserves shrinking, market dynamics are aligning in a way that could set the stage for further upsides. The combined effect of institutional and spot demand has created a landscape where a technical breakout appears increasingly plausible.
Attention has shifted to several technical thresholds. The pattern’s neckline, near $73,238, overlaps with a key Fibonacci retracement and is being seen as an inflection point. A daily close above this level could validate the cup and handle setup and open the door to higher targets, while failure to clear this resistance keeps the formation in a holding pattern.
In order to confirm the bullish configuration, prices may first need to regain $71,649, indicating the handle phase is drawing to a close. At the same time, the pattern remains intact as long as the current consolidation stays above the midpoint of the cup’s depth.
As the CPI release approaches, two potential scenarios have started to emerge. Market observers are watching whether Bitcoin can maintain momentum in the face of higher inflation readings, which could reinforce its narrative as an inflation hedge. Alternatively, if selling intensifies following the release, but remains within the confines of the established technical structure, the pattern could still be considered valid.
Support areas have also been identified. The $70,060 level marks initial support, while a deeper drop to $68,093 or below could destabilize the handle. A retreat under $64,915 would call the entire bullish scenario into question and invalidate the pattern.
