Bitcoin recorded one of its most impressive daily performances in recent history yesterday when it pumped from a daily low of $53,600 to just over $58,000.

Here are some of the possible reasons behind this surge while the community speculates whether the worst has passed and BTC could resume its 2024 bull run.

ETF Flows

Ever since their inception in mid-January this year, the US spot Bitcoin ETFs have played a significant role in the underlying asset’s price movements. Trends of positive flows have led to price increases and vice versa.

As such, it wasn’t a big surprise that BTC tumbled hard in the past few weeks, from over $64,000 (on August 26) to under $52,500 (on September 6). Within this timeframe, the ETFs saw almost $900 million in net outflows.

However, the trend changed on Monday, and investors broke the longest negative streak in the history of ETFs. The net inflows for the day exceeded $28 million, and this could be among the most probable reasons behind BTC’s price resurgence.

Going Against the Crowd

The popular crypto analytics tool, Santiment, has repeatedly outlined a certain strategy that’s relatively unpopular among the community. After all, it advises traders to go against the crowd, which seemed to have worked in the past day.

The latest report informed by traders had ‘heavily’ shorted BTC on major exchanges like Binance and BitMEX since Saturday. According to Sentiment, “trader FUD and doubt in this rally will only fuel prices higher.”

Bitcoin’s market value is finally rallying, making it as high as $57.6K Monday and +4.8% in the past 24 hours. On major exchanges like Binance & Bitmex, Bitcoin has been heavily shorted since Saturday. Trader FUD and doubt in this rally will only fuel prices higher. pic.twitter.com/1uY1AaQBLx

— Santiment (@santimentfeed) September 9, 2024

Stablecoins Inflows

Another possible reason behind BTC’s impressive daily surge could be attributed to investors trying to take advantage of the price dip. This is supported by data from IntoTheBlock, which reads that $300 million worth of stablecoins were transferred into exchanges on Monday.

Stablecoins are the easiest gateway for investors to purchase digital assets on exchanges. Such large movements are typically executed to look for good buying opportunities, such as the recent price dips.

$300 million worth of stablecoins flowed into exchanges yesterday, signaling a potential move by investors to capitalize on the dip. pic.twitter.com/c7CTrqc8oT

— IntoTheBlock (@intotheblock) September 10, 2024

Back in early August, when BTC’s price tumbled even lower (under $50,000), the total stablecoin inflows skyrocketed to around $1 billion. Days later, the cryptocurrency, alongside most of the market, recovered its losses and even soared past $65,000 in weeks.

Something relatively similar on the matter came from Lookonchain. The on-chain resource informed that larger bitcoin investors had withdrawn more than $34 million worth of the asset in the past day alone. This could reaffirm the thesis that investors have used the opportunity to go on a buying spree.

Ethereum’s recent price action shows signs of a short-term recovery after hitting the critical support level of $2.1K.

However, despite this brief uptick, the broader market remains deeply bearish, with expectations pointing toward a period of consolidation before the next significant move.

Technical Analysis

By Shayan

The Daily Chart

On the daily chart, ETH encountered strong resistance around $2.8K, leading to a rejection and subsequent downward movement. After this sustained decline, the asset found support at the crucial $2.1K level, which is also the previous daily swing low.

Upon reaching this support, bearish momentum faded, and Ethereum experienced a slight rebound, signaling the potential for a short-term recovery. Furthermore, a bullish divergence between price and the RSI suggests an increase in buying interest, which raises the likelihood of a short-term bullish correction.

Given the presence of buying pressure at $2.1K and the divergence, Ethereum is likely to enter a consolidation phase, with the possibility of slight bullish upticks toward the $2.5K resistance level.

The 4-Hour Chart

On the 4-hour chart, Ethereum faced strong rejection from the resistance zone between the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci levels. This rejection, driven by increased selling pressure, pushed the asset to the $2.1K support region. The bullish divergence between the price and RSI is more prominent in this timeframe, further indicating a rise in buying pressure.

Ethereum is undergoing a mild bullish retracement, easing the downward pressure. Continuing this recovery could push the price toward the $2.5K level in the short term. However, if Ethereum breaks below the crucial $2.1K support, it could trigger a sell-off, potentially leading to a further drop toward the $1.8K region.

Onchain Analysis

By Shayan

Analyzing the futures market can offer key insights into Ethereum’s price action, especially during downtrends. The ETH/USDT Binance liquidation heatmap visually represents prominent liquidity pools, which often serve as price targets for larger market players or “smart money.”

According to the heatmap, the $2.5K level holds the highest concentration of liquidity near the current price. Liquidity acts like a magnet for price action, so this zone becomes a critical short-term target.

A bullish retracement toward this level is highly probable, driven by the market’s tendency to seek out these liquidity pools. Consequently, the $2.5K price range represents a pivotal area to watch, as its strength could determine the continuation of Ethereum’s current upward movement.

Bitcoin’s price has been trending lower since the last week of August, breaking below multiple support levels.

Yet, it’s currently showing signs of a possible rebound, as the asset jumped by more than four grand yesterday. Could there be more bullish moves on the horizon?

Technical Analysis

By Edris Derakhshi

The Daily Chart

The daily chart demonstrates that the BTC price has dropped since getting rejected from the 200-day moving average, located around the $64K resistance level. Several support levels have been lost since, and the price has dropped to just over $52K.

The market has rebounded slightly from that level, but the momentum is clearly bearish. As a result, the asset still needs to break above the $64K zone and the 200-day moving average to begin a new bullish trend.

The 4-Hour Chart

In the 4-hour timeframe, it is evident that the price has been declining inside a descending channel. Yet, the market has broken above the channel recently, and a rally toward the $60K level is likely in the short term.

This is, of course, if the breakout is valid and the market does not quickly drop back inside the channel. With the RSI also showing bullish momentum in this timeframe, a rally higher is highly probable.

On-Chain Analysis

By Edris Derakhshi

Bitcoin Long-Term Holder SOPR

In the Bitcoin network, long-term holders usually possess the majority of the supply. As a result, analyzing their behavior could be highly beneficial for understanding the market supply and demand dynamic.

This chart presents the 30-day moving average of the Long-Term Holder SOPR metric, which measures the ratio of realized profits/losses by long-term BTC holders.

As the chart suggests, the LTH-SOPR has been declining since the market’s failure to break above the $70K level. This demonstrates profit-taking behavior by long-term holders when the price is declining. If this trend continues, the subsequent selling pressure can lead to even more downtrend for the price.