Bitcoin’s price has entered a consolidation phase, trading at $105,550 on June 8, reflecting a 5% recovery from last week’s lows but remaining 5.75% below its annual peak. The market dynamics suggest a mix of profit-taking, declining sentiment, and strategic moves by investors and institutions.

ETF Outflows Signal Market Uncertainty

Recent data highlights consecutive weekly outflows from Bitcoin exchange-traded funds (ETFs). According to SoSoValue, these funds saw $128 million in withdrawals last week, following $157 million the previous week. This marks the first back-to-back outflow since April, pointing to investors’ cautious approach as they seek to lock in profits after Bitcoin’s May rally to an all-time high of $111,900.

Adding to this uncertainty is China’s potential liquidation of its seized Bitcoin holdings. Reports suggest the country controls over 190,000 coins, valued at more than $20 billion, heightening fears of potential market oversupply.

Shifting Sentiment in the Crypto Space

Investor sentiment in the crypto market has turned neutral this month. The Fear and Greed Index, a popular gauge of market emotions, has dropped to a balanced score of 56, reflecting a pause in bullish momentum. This shift in sentiment follows Bitcoin’s meteoric 50% rise from April to May, which likely prompted many to reassess their positions.

Institutional Moves and Shrinking Exchange Supply

Despite these challenges, long-term indicators remain bullish. The supply of BTC on exchanges has been steadily declining, reaching 1.18 million this month, down from 1.35 million at the start of June and significantly below the 2020 peak of 3.5 million. This drop suggests a growing trend of investors moving Bitcoin into secure, long-term holdings.

Meanwhile, institutions continue to ramp up their Bitcoin acquisitions. Strategy is raising $2 billion for additional purchases, while Trump Media has filed to raise $12 billion for similar purposes. Firms like MetaPlanet and The Blockchain Group are also increasing their Bitcoin exposure, signaling strong institutional confidence in the asset’s future prospects.

Technical Analysis Hints at a Potential Rally

From a technical standpoint, BTC’s daily chart shows the formation of a bullish cup-and-handle pattern, with the handle nearing completion. The cryptocurrency remains above the critical 50-day and 200-day moving averages, providing robust support levels. Furthermore, Bitcoin is holding strong at a significant pivot point identified by the Murrey Math Lines tool.

These technical factors suggest that Bitcoin may be poised for a breakout. The initial target is the upper side of the cup at $109,477, with the potential to test its previous all-time high of $111,900. If this resistance is surpassed, a surge to $150,000 could be on the horizon.

Outlook: Consolidation Before the Next Move

While Bitcoin faces headwinds from ETF outflows and a cooling sentiment, the decreasing exchange supply and ongoing institutional interest offer a counterbalance. Combined with solid technical indicators, these factors suggest that the current price stagnation could be a temporary pause before the next upward leg. Investors should watch key resistance levels closely as the market gears up for potential gains.