Bitcoin Blocked Twice at $85,000…Is a Third Breakout Possible?

▲ Bitcoin (BTC) ©Godasol

Bitcoin (BTC) has failed to break through $85,000 twice this week, continuing a challenging trend below $84,000. The nine consecutive trading days of spot ETF inflows turned into a net outflow of $148.69 million, coupled with a surge in US Treasury yields and a strong dollar, quickly depleting the upward momentum created by softer-than-expected inflation data.

According to the investment media FXStreet on October 1 (local time), Bitcoin Spot ETFs recorded a net outflow of $148.69 million on Wednesday, ending a nine-consecutive-day streak of net inflows. SoSoValue data shows that since September 21, ETF net inflows have gradually decreased and eventually turned into net outflows. The media analyzed that if fund outflows continue and expand this week, it could weaken institutional buying momentum and increase BTC's correctional pressure.

The macroeconomic environment is also holding Bitcoin back. US 5-year Treasury yields are over 5% and 10-year yields are over 5.2%, each maintaining their highest levels in 19 years. As Treasury yields rise, the investment appeal of traditional bonds has increased compared to risk assets like Bitcoin, while the US Dollar Index (DXY) also broke above 101.80 on Thursday, rising to its highest level since June. BTC attempted to recover $85,000 twice on Monday and Wednesday but was met with resistance each time.

Conversely, expectations for an October interest rate hike by the Federal Reserve (Fed) have decreased as the US August Personal Consumption Expenditures (PCE) inflation data, released on Wednesday, was softer than expected. According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of a 25bp rate hike fell from 70.86% on Monday to 37.1% on Thursday. Following the data release, Bitcoin surged to $85,649 intraday but failed to sustain the upward trend, closing slightly lower at $83,623. The market is closely watching Thursday's US Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI), Friday's Nonfarm Payrolls (NFP), and statements from key Federal Open Market Committee (FOMC) officials.

Technically, BTC traded at $83,358 on Thursday, remaining below the $85,000 resistance level. However, the price is above the 50-day Exponential Moving Average (EMA) of $78,024, the 100-day EMA of $74,490, and the 200-day EMA of $74,488, maintaining an overall bullish structure. The Relative Strength Index (RSI) is around 59, indicating continued buying pressure, but the Moving Average Convergence Divergence (MACD) histogram remains in negative territory, signaling that upward momentum is still weak.

To the upside, $85,000 remains the most crucial resistance level. Conversely, if further correction occurs, the 50-day EMA at $78,024 is the first major support, followed by the area around $74,490, where the 100-day and 200-day EMAs converge, serving as a medium-term defense line. If the bullish structure is significantly damaged, existing horizontal support levels at $66,500 and $62,300 are mentioned as deeper downside support. Ultimately, with institutional fund flows weakening, whether BTC can succeed in its third attempt to break through $85,000 has emerged as a key variable determining its short-term direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*