The price of Bitcoin retreats as investors see Grayscale ETF daily outflow hit a new high and scale back expectations for Fed rate cuts. This decrease in Bitcoin’s value has caused concern in the cryptocurrency industry, but according to past data, the current behavior of the BTC price movement is typical.
Bitcoin Retreats
The price of Bitcoin retreated to $63,800, down from its peak of $73,798 on March 14.
Typically, Bitcoin’s price increases to a high about 4 to 5 weeks before its halving event, followed by a period of consolidation. During this time, the price does not show any significant upward or downward movements but rather moves sideways.
This is when other cryptocurrencies, known as altcoins, tend to have increased activity. However, recent bearish signals for Bitcoin’s price, like the On-Balance-Volume (OBV) breaking its upward trend, point to the possibility that Bitcoin might soon break its lower support levels and may even decrease further.
The On-Balance Volume (OBV) helps predict price changes by looking at the trading volume. The OBV has fallen below its upward trend line, showing that the selling pressure might increase. This negative volume flow could be a signal for a potential drop in price. As a result, the price of Bitcoin has formed its daily lows around $62,800.
Secondly, the FOMC expects not to change interest rates anytime soon. With the US elections in September, the government is unlikely to make any rate cuts. Also, the impact of the spot ETF seems to have decreased, as Grayscale’s net inflow has dropped significantly recently, while outflows hit a high of over $640 million.
Grayscale ETF Daily Outflow
There was a big Grayscale ETF Daily Outflow of $642.5 million on March 18, the largest since it converted to an ETF on January 11, 2024. This, along with Fidelity’s Bitcoin ETF, had its lowest inflow day at $5.9 million, while the spot Bitcoin ETFs had a net outflow of $154.3 million.
According to the experts, these recent price movements might be due to several factors, such as reduced Bitcoin ETF flows, the upcoming halving event, and the U.S. Federal Reserve’s FOMC meeting on March 20.
Despite the recent outflows, some analysts are positive about the future of Bitcoin ETF flows.
Grant Englebart, VP at Carlson Group, talking about the recent Grayscale ETF outflow, said that only a few of their advisors had seen their clients investing in Bitcoin ETFs, with an average of 3.5% of total funds being allocated.
Eric Balchunas, an ETF analyst at Bloomberg who shared Grant’s views, indicated that the current flows were mostly coming from early adopters. Eric said that the advisors have yet to approach the rest of their clients, showing potential for the growth of Bitcoin ETF investments in the future.
Source: https://www.bloomberg.com/
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