Bitcoin heads higher after dipping 10%
Bitcoin (BTC-USD) rose more than 1% against the dollar on Monday, recovering slightly following a week where its total value decreased by more than 10%.
On Monday, the cryptocurrency was trading at $58,455. Ethereum (ETH-USD), the second-largest cryptoasset also rose 1.9% against the dollar, to sit above the $2,500 mark.
The negative price movement over the last week was accompanied by outflows from spot BTC exchange traded funds. After a positive start last week, spot bitcoin ETFs experienced four consecutive days of outflows, ending the week with approximately $277m in net outflows, according to analysts at Fineqia.
"Interestingly, the correlation between BTC's price action and the ETF flows appeared weak, as positive inflows were recorded on Monday and Tuesday despite the significant price drop from over $64,000 to $58,000," said Matteo Greco, Fineqia research analyst.
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"More substantial outflows occurred later in the week when BTC's price remained relatively flat, suggesting that the recent price decline may be more closely tied to on-chain and digital asset exchange activities than to ETF flows," he added.
"Trading volumes remained robust, with BTC spot ETFs recording about $7.7bn in cumulative trading volume for the week and approximately $40bn for the month of August. This level of activity, uncommon for July and August, indicates strong interest and demand for BTC-based financial products."
September has been a seasonally bad month for bitcoin over the last few years — it is also known for being a choppy month in traditional financial markets, heading into the second half of the financial year.
Traders have uncertainty around the path of interest rates and the outcome of the US election to contend with. If the Federal Reserve does cut interest rates in September it could boost the outlook for bitcoin. Most analysts think that rate cuts would be bullish for cryptocurrencies, which are considered a risk asset.
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