Bitcoin on the Brink: Market Unrest Fuels Potential Price Breakdown
Summary:
Bitcoin's price hovered dangerously over $61,000 on March 20, with indications of further slippage. With Bitcoin valued 17.5% lower than its record high, market trends show a persistent decline. Factors contributing include the withdrawals from US spot Bitcoin ETFs and recent decisions on interest rates by the Federal Reserve. Farside's data show a second consecutive day of net outflows from Bitcoin ETFs. Trading firms suggest an air of caution precedes the FOMC meeting, with dire implications for Bitcoin's value if the net negative outflow continues.
Bitcoin's value hovered precariously over $61,000 on March 20, with indications suggesting a potential dip, as support poised delicately on the brink of buckling. Reports from Cointelegraph Markets Pro and TradingView highlighted Bitcoin's declining trend, bottoming at $60,760 on Bitstamp. Currently valued at 17.5% lower than its highest ever, Bitcoin continued to encounter declining market trends attributable mainly to key factors.
These contributing factors range from the withdrawal of money from the country's Bitcoin ETFs, to the recently announced decisions on interest rates by the Federal Reserve. The Federal Open Market Committee (FOMC) meeting's result is anticipated, while Fed Chair, Jerome Powell's subsequent response is keenly watched by those dealing with risk assets.
Trading utils, such as The Kobeissi Letter, hedging their bets on the unlikely event of rate changes, stated, "it is far too premature to expect a shift in policy". As per projections from the CME Group’s FedWatch Tool, the probabilities of such a shift, translated as a return to slashes in rates, stand at 1% for March 20, escalating slightly to 9.1% for the FOMC assembly in May, and peaking at 55% by June.
The outlook for Bitcoin ETF recovery appears choppy, following a second day of net outflows from the UK based investment firm, Farside. Interestingly, the pullout was less from the Grayscale Bitcoin Trust (GBTC), however the solo exodus resulted in relatively unspectacular data.
Financial observer, Tedtalksmacro noted, "nearly $500million USD has exited from on-the-spot Bitcoin ETFs in the preceding two days". As proposed reasons, he suggested that traders are maintaining a cautious approach pre-FOMC, or potentially pulling out due to tax season in the US.
QCP Capital, in their daily summary, titled "Asia Morning Color", distributed among its Telegram channel subscribers, hinted that a second day of more outflows than inflows could spell serious concerns for Bitcoin's value.
Every investment move is fraught with uncertainty, it is prudent, therefore, for investors to undertake independent research before making a decision.
Published At
3/20/2024 9:36:02 AM
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