Bitcoin rebounds but traders price in further downside

Key facts

• Bitcoin traded at $82,837 on Friday, up 1.38%.
• Bitcoin fell to $80,427 on Thursday.
• Total crypto market capitalization rose 2.1% to $2.89 trillion on Friday.
• Bitcoin ETFs saw outflows of $484.9 million on Wednesday and $244 million on Thursday.
• The Fear & Greed Index dropped to a neutral 56.
• Traders assign a 67% chance Bitcoin will trade at or below $80,000 in October.

Bitcoin experienced a rebound on Friday, trading up 1.38% at $82,837, after a challenging week that saw it dip to $80,427 on Thursday. The broader crypto market also saw gains, with total capitalization rising 2.1% to $2.89 trillion. However, sentiment remains cautious, as indicated by the Fear & Greed Index falling to a neutral 56 from 71 a week prior.

Institutional investors showed nervousness, with Bitcoin ETFs shedding $484.9 million on Wednesday, marking their worst day since June 25, and an additional $244 million on Thursday. This outflow coincided with the 10-year Treasury yield reaching 5.32% and Federal Reserve minutes suggesting a potential year-end rate hike.

Market participants are pricing in further downside for Bitcoin. A prediction market indicates a 67% probability that Bitcoin will trade at or below $80,000 before the end of October, with 40% odds for $77,500 and 24% for $75,000. Technical indicators, such as the price trading below the 50-period exponential moving average on the four-hour chart, suggest the short-term trend has not yet turned bullish. The Average Directional Index reading of 37.9 confirms a strong trend, and while directional lines show buyers in control, the Relative Strength Index at 51.2 indicates a neutral buying pressure.

Analysts note that the $83,000 zone presents a key resistance level, combining the average ETF cost basis with a prior higher-high. Reclaiming this level could bring $84,433 into play, with the September high of $87,354.33 serving as a critical ceiling for bulls.