Here’s what bitcoin needs to break above $87,000

Bitcoin BTC$83,731.16 and the other majors are lower today, but zoom out and the picture is flatter than the daily tape suggests: prices have gone essentially nowhere over the past two weeks.

The choppy trading is a part of a typical stair-step rally, according to some observers, and it could soon pave the way for a move above $87,000.

The question is what would turn that pause into a firm break above the range. The answer sits in what drove the September surge: large spot ETF inflows.

U.S. spot bitcoin ETFs attracted roughly $2.6 billion in September, with the week ended Sept. 25 alone accounting for about $2.39 billion of the monthly tally. Inflows peaked at nearly $999 million on Sept. 21. Since then, however, demand has cooled sharply, with ETFs drawing $241 million last week and just $28 million so far this week.

“I read the current move as evidence that the ETF bid that carried September has not yet returned strongly enough to offset renewed macro pressure. ETF inflows above roughly $300 million a session for several sessions (my threshold rather than a market one) would be an important signal that institutional demand is returning,” Oliver Carding, head of marketing at Tesseract Group, said in an email.

Martin Lee, head of content and data insights at DWF Labs, said large daily inflows matter more than extended inflow streaks that cumulatively bring in only a few hundred million dollars.

“Looking across the year, we’ve had 93 out of 190 (48%) trading days be negative while still seeing net $1.2B of inflows. Longer-term (week/month) size of flows is more important compared to daily, which is almost a coin flip this year, but definitely something worth monitoring to see how the situation progresses,” he said.

Meanwhile, other types of buyers are accumulating.

“Investors appear to be using periods of weakness to accumulate and dollar-cost average alongside institutional buyers,” Paul Howard, senior director at Wincent, said. “Many market participants are continuing to target Bitcoin at $100k+.” Stay alert!

Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk’s Crypto Week Ahead.

• U.S. government moves over $100 million in BTC and BNB. A sale hasn’t been confirmed (CoinDesk): Wallets supposedly linked to the U.S. government 833.599 BTC, worth about $71.6 million, to two addresses Arkham doesn’t label. A separate government-labeled wallet sent about 40,285 BNB, worth $31.63 million, to another unlabeled address.
• Bitcoin dips below $84,000 as oil jumps on Iranian tanker attacks (CoinDesk): Bitcoin fell about 1.5% to just above $84,200 as of Wednesday Asian morning hours as oil climbed on stepped-up Iranian attacks on tankers in the Strait of Hormuz, lifting Treasury yields and the dollar.
• Cardano gives token issuers power to freeze, seize and restrict assets (CoinDesk): The Cardano Foundation launched a token standard that lets issuers of stablecoins, funds and bonds decide who can receive their assets, and freeze or seize holdings when the rules require it.
• Dollar gains as oil climbs and investors focus on the Fed (Reuters): The U.S. dollar edged higher, buoyed by rising oil prices, while investors awaited Federal Reserve meeting minutes and remarks from policymakers for signals ​on a potential rate hike. The euro gave back some of its gains. The yen weakened.

The chart shows daily swings in the Binance-listed ether-bitcoin ratio in candlestick format. Overlaid on the chart is the Ichimoku Cloud, a momentum indicator invented by a Japanese journalist in the 1960s.

The ratio has crossed below the Ichimoku Cloud, a sign of a bearish shift in momentum. Assuming the breakdown holds, it means ether’s uptrend against bitcoin is over.

The immediate support is represented by the yellow line drawn off the Sept. 4 low of 0.03059. A potential break lower would further confirm the bearish outlook.