Although recent U.S. economic indicators point to a soft landing, recession concerns remain.

Risk aversion emerged on Tuesday as markets focused on crucial U.S. economic data this week.

Services PMI and labor market data will influence the market demand for BTC. Positive trends in the services sector and labor market could end concerns about a hard landing for the U.S. economy while supporting bets on a September rate cut by the Federal Reserve.

Nvidia plunged 9.53%, leading the decline in the technology sector. The Nasdaq Composite fell 3.26%, its biggest one-day drop since July 24, when it fell 3.64%.

Risk aversion spreads to the US BTC spot ETF market

Market risk aversion spread to the U.S. BTC spot ETF market on Tuesday. According to data,

FBTC saw a net outflow of $162.3 million, the largest single-day outflow since May 1.

GBTC net outflow of $50.4 million

ARKB had a net outflow of $33.6 million.

BITB had a net outflow of $25 million.

According to IBIT's flow data, the U.S. BTC spot ETF market had a net outflow of US$287.8 million, marking five consecutive trading days of outflows.

The current outflow trend continues as concerns about oversupply persist.

US government supply risks remain

BTC supply and demand trends are crucial to BTC movement. The risk of excess supply associated with the United States’ BTC reserves remains a potential headwind. It currently holds 20.3 BTC ($12.07 billion).

The U.S. government's transfer of a large amount of BTC reserves may lead to oversupply. In addition, oversupply may affect demand and depress prices, especially in the case of continued outflows from the ETF market.

BTC transfers in July and August triggered BTC’s pullback from $70,000.

Excess supply could push BTC down to $55,000. Conversely, a rebound in inflows into the US BTC spot ETF market could push BTC up to $65,000.

Supply and demand trends can change, and traders should remain vigilant and watch for changes in sentiment towards the U.S. economy. Stay up to date with our latest updates and analysis to manage your exposure to BTC and the broader market.

Technical aspects:

Short-term direction of the pie:

BTC is below the 50-day and 200-day EMAs, confirming a bearish price signal.

A breakout above the 200-day EMA and the $60,365 resistance will support a move towards the 50-day EMA. Moreover, a breakout above the 50-day EMA could allow the bulls to rush towards the $64,000 resistance.

US labor market data, sentiment towards the Fed’s rate path, and BTC spot ETF market flow trends need to be considered.

Conversely, a break below $57,500 could signal a drop towards $55,000. A break below $55,000 could trigger the $52,884 support level.

With a 14-day RSI reading of 42.72, BTC could drop below $55,000 and then enter the oversold zone.

Ethereum short-term direction:

ETH is hovering below the 50-day and 200-day EMAs, confirming a bearish price signal.

ETH’s return to $2,500 is expected to hit the $2,664 resistance level. Moreover, a break above the $2,664 resistance level could foreshadow a rally in ETH price to $2,800.

Updates related to the US ETH spot ETF market also need to be considered.

Conversely, if ETH breaks below the $2,320 support, it could signal a drop towards the $2,124 support level.

The 14-period daily RSI reading of 38.73 indicated that ETH fell to the $2,320 support level before entering the oversold zone.