Bitcoin Battles Losses Amid ETF Changes and Federal Reserve Moves
Summary:
Bitcoin tried to mitigate its losses on Feb 1, following a lackluster monthly closing. Despite a 20% decrease from a two-year high, warnings of new lows are increasing. The U.S. Federal Reserve's recent actions with interest rates and the ongoing outflow from the Grayscale Bitcoin Trust (GBTC) further impacts the market. The U.S. spot Bitcoin ETFs observed nearly $200 million in net inflows for Jan 31. However, each investment or trading initiative carries risk and individuals are advised to conduct their own research.
Bitcoin attempted to counteract its losses on the first day of February, following a mediocre monthly closure that affected its course. BTC/USD showed a moderate recovery, oscillating around $1,000 from a low of $41,860 on Bitstamp, as revealed by Cointelegraph Markets Pro and TradingView data. This followed closely on the heels of January's final standing, placing Bitcoin at a mere 0.6% increase for the start of 2024.
After suffering from a 20% fall from a two-year high of $49,000, Bitcoin investors are grappling with regaining their footing. As we ushered in February, there were increasing warnings for potential new lows. Trading tool Material Indicators, a key resource on X (previously Twitter), pointed out potential downward trends via its proprietary trading analytics.
A post from the same source stated that monthly graphs don't guarantee a lower low this month, but they do suggest we won't see a new high unless fresh #TradingSignals make it irrelevant. Additionally, it wouldn't be surprising if Bitcoin tests the support at the local low of approximately $38.5k by the end of the month.
January's bottom point, a result of the 20% BTC price retreat, sat at $38,500. On top of this, macroeconomic changes on January 31 did nothing to ease the situation. Despite leaving interest rates as expected, the United States Federal Reserve tried to curb rate cut predictions for the first half of the year. This intentional manoeuvre is eagerly watched by traders dealing in risky assets, as reducing monetary constraints boosts liquidity surroundings.
In the face of adjusting the target rates for federal funds, the Committee will carefully scrutinize incoming data, developing projections, and risk balance. According to an official announcement, the Committee clarified it doesn't anticipate reducing the target range until it's more certain that inflation is steadily inline with 2 percent.
With regards to chance of a cut in the Fed's March assembly, data from CME Group’s FedWatch Tool indicated a 45% probability at the time of reporting.
Meanwhile, on the first day of February, about 6,200 BTC flowed out of the Grayscale Bitcoin Trust (GBTC), according to real-time data from cryptocurrency intelligence agency Arkham.
U.S. spot Bitcoin ETFs registered almost $200 million in net inflows for January 31, as confirmed by several sources, including Bloomberg Intelligence. Analyst James Seyffart reported, "Total net inflows of $1.46 billion since launch," while sharing the data on X.
This report doesn't provide investment counsel or recommendations. Each investment or trading initiative has its own risks. Therefore, individuals should conduct independent research when deciding to act.
Published At
2/1/2024 7:39:45 PM
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