Tue, April 16, 2024

Bitcoin Dips 0.27%, ETFs Surge with $600M Inflows

Is Bitcoin a hedge Contra Inflation?

Quick Look

  • Bitcoin slightly declined by 0.27%, closing at $49,710 after a previous rally.
  • U.S. annual inflation rate decreased to 3.1%, with core inflation remaining at 3.9%.
  • Bitcoin-related ETFs saw varied net flows, with iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund witnessing significant inflows.
  • Ethereum shows bullish signs, trading above key EMAs with potential resistance levels ahead.
  • Total ETF inflows on February 13 surpassed $600 million, highlighting investor interest.

On Tuesday, Bitcoin (BTC) experienced a slight decline, losing 0.27% of its value to close at $49,710, following a 3.49% increase on Monday. This downturn happened against the backdrop of softening U.S. inflation rates, which fell to 3.1% in January from December’s 3.4%, contrary to the expected 2.9%. Notably, core inflation stayed steady at 3.9%, defying predictions of a decrease to 3.7%. These inflation figures, crucial for assessing purchasing power and investment strategy, indirectly impact Bitcoin’s appeal as an inflation hedge.

Dissecting Bitcoin ETF Market Flows

The Bitcoin ETF market, indicative of both institutional and retail attitudes towards cryptocurrency, saw significant changes. Net inflows into the BTC-Spot ETF market dropped from $541.5 million to $493.3 million. The iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) saw inflows of $374.7 million and $151.9 million, respectively, signalling increased investor confidence. However, the Invesco Galaxy Bitcoin ETF (BTCO) experienced outflows, reflecting varied investor views.

Ethereum’s Technical Outlook

Ethereum’s (ETH) current position above the 50-day and 200-day Exponential Moving Averages (EMAs) suggests a bullish outlook. A firm move above the $2,650 resistance could open the door to further advances, with targets at $2,714 and possibly $2,750. Ethereum’s 14-period Daily Relative Strength Index (RSI) is at 70.98, indicating overbought conditions. This points to a high level of buying activity but also signals caution for traders.

ETF Inflows and Market Sentiment

ETF inflows provide further insight into market sentiment. On February 13, total inflows surpassed $600 million, with nearly half a billion dollars going to BlackRock’s ETF product. Despite regulatory and market uncertainties, this influx into ETFs demonstrates a strong interest in cryptocurrency investments.

The landscape for Bitcoin and Ethereum is continually shaped by macroeconomic indicators, technical analysis, and ETF market flows. While Bitcoin encounters higher-level resistance, Ethereum’s technical signals hint at possible upward momentum. The varied ETF inflows depict a market balancing caution with optimism. As the cryptocurrency sector moves through these challenges, investors closely monitor trends and opportunities for potential growth.

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