Bitcoin appears to be on a different trajectory than the bullish predictions many investors had predicted following the network halving on April 19th. It has fallen 11% over the past day and was trading at $56,889 on Wednesday afternoon, according to CoinGecko data. About $64,000 at halving. Prices have fallen 20% since hitting an all-time high of $73,000 in mid-March.
With the halving looming and exchange-traded fund flows drying up, “this leaves Bitcoin watchers focused on macro, making the picture cloudy at best,” CoinDesk Index said. said Andrew Baer, head of product. luck.
According to the Consumer Price Index, the latest inflation rate as of March 31 was 3.48%, up from 3.2% in February. As a result, expectations that the US Federal Reserve (Fed) could cut interest rates on May 1 have faded. “This creates a difficult market for risk assets in general, and Bitcoin and cryptocurrencies are likely to follow suit,” said David Rowant, head of research at FalconX. luck.
ETF flows have begun to slow as U.S. inflation beat expectations for the second consecutive month. Since March 18, the ETF has experienced outflows on 58% of all trading days, with outflows of $580 million since the halving, according to 10x Research.
According to data from CoinGlass, inflows into BlackRock's winning product, IBIT, fell to zero for the first time last week, halting new investment for 71 consecutive days. The fund has not reported any inflows since then. Also last Thursday, Fidelity's FBTC, currently in second place in the ETF race, reported its first outflow, but the outflows have continued since then, totaling $67.6 million.
The average ETF buyer may be “below the surface,” said Markus Thielen, CEO of 10x Research. luck. He estimates the total entry price for holders to be $57,300, slightly less than the value of the underlying assets. “We expect more selling in the short term due to stagflation concerns,” he added.
Additionally, in the derivatives market, total liquidations for Bitcoin and Ether futures exceeded $300 million since Tuesday, also creating downward pressure on prices, according to data from Coinglass.
According to Thielen, liquidations could be caused by TradFi tourists pushing long positions to the halving, and could also be caused by Bitcoin miners selling supply to protect their businesses. He added that the price is expected to be in the $53,000 to $55,000 range.
Experts also cautioned against expectations that a rally immediately following the halving could offset these macroeconomic conditions, pointing instead to a longer-term rally that would take months rather than weeks.
For example, two weeks after the last halving in May 2020, Bitcoin's price rose by just 1.5% and remained flat for the next two months, according to data from CoinGecko. But from there he rose more than 500% in less than a year. Similarly, after the July 2016 halving, there was no significant price change until three months after the event, but it started to rise gradually, culminating in a 3,000% price increase by the end of the following year. Reached.
“The market is looking for the next short-term industry catalyst following the halving and the launch of a crypto spot ETF in Hong Kong, but some players are setting expectations a little too high for it. It could have been,” Rawant said.
