The Bitcoin market cycle indicator has once again entered a bear phase, signaling caution for investors.

From a valuation standpoint, if Bitcoin’s price falls below $56,000, the risk of a larger correction could increase significantly.

However, some major players seem to be taking advantage of the recent dip. On-chain data from Santiment reveals a substantial 40,000 BTC drop in exchange supply over the past 48 hours, equivalent to about $2.40 billion.

This coincides with a notable surge in exchange outflows, suggesting strong buying pressure as investors move their Bitcoin off exchanges. The average Exchange Inflow/Outflow ratio indicates robust buying activity, marking the sixth such occurrence in the past decade.

Despite this buying pressure, retail investors have yet to react. Historically, retail investors tend to enter the market only when prices soar above $70,000, missing the lower entry points that institutional players capitalize on.

In macroeconomic news, the U.S. core Personal Consumption Expenditures (PCE) price index for July increased by 2.6% year-on-year, just below the expected 2.7%. On a month-on-month basis, the index rose by 0.2%, in line with expectations.

This steady inflation rate, neither accelerating nor declining, could be seen as positive by markets and policymakers. It may improve the odds of the Federal Reserve considering an interest rate cut, which could further impact Bitcoin’s market dynamics.

Bitcoin Spot ETFs Recorded Net Outflow Of $71 Million 

Additionally, on August 29, Bitcoin spot ETFs saw a total net outflow of $71.73 million. Grayscale’s ETF GBTC alone accounted for $22.68 million in outflows, while Ark Invest and 21Shares’ ETF ARKB recorded an inflow of $5.34 million. Currently, the total net asset value of Bitcoin spot ETFs stands at $54.36 billion.

As Bitcoin navigates this bear phase, the actions of major investors and the broader economic context will likely play a crucial role in determining its next move.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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