The recent sell-off in Bitcoin was initiated by new regulations on stablecoins, coupled with a downturn in US stock indices. Despite this, strong buy-the-dip activity in the S&P 500 helped Bitcoin’s price rebound.
In July, Bitcoin-focused ETFs achieved a historic $6 billion in capital inflows, highlighting positive sentiment towards the asset. Unfortunately, investor interest began to dwindle at the start of August, as reflected by changes in Coinbase’s premium.
Looking ahead, Bitcoin’s price trajectory will depend heavily on the S&P 500’s performance and capital flows into ETFs. If the S&P 500 faces challenges, Bitcoin may experience significant corrections, especially if prices stay below the consolidation range of $116,000 to $120,000.
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