Amid a broader reshaping of market expectations for interest rate cuts by the Federal Reserve (Fed) for 2025, investors withdrew a record $680 million from Bitcoin ETFs on Thursday, the highest outflow ever the same day since they were given permission in January. investment fund.
Grayscale And Bitwise Bitcoin ETFs experienced a decline of 8%.
As Bitcoin ETFs resisted this trend, the price went down, falling another 5% to trade around $97,400 to close the week. The selloff coincides with a general decline in risk assets, spurred by the Fed's Download economic presentation published earlier this week.
The US Federal Reserve now expects only two quarterly rate cuts in the coming year, a significant reduction from the four cuts expected at its September meeting.
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Prominent Bitcoin ETFs, including the Grayscale Bitcoin Trust and Bitwise's Bitcoin ETF, have declined by about 8% since the Fed's new guidance, while Bitcoin itself has lost about 9% in the same timeframe.
In particular, streams broke out on Thursday a series of 15 consecutive days in download for the dozen US Bitcoin ETFs, for a net inflow of about $5.3 billion during this period.
After hitting a record high of just over $108,000 earlier in the week, the market's leading digital currency fell below the $100,000 level on Thursday. Before the recent revival, which is just around $100,000, it fell all the way to $92,000.
While the bearish sentiment in the markets to be due to the cautious position of the Fed, it also tends to affect the quarterly profit among institutional investors of the Bitcoin ETFs.
Analysts warn of continued crypto selling
The recent selling pressure could weigh on market sentiment, as was noted by Joseph Dahrieh, managing director at Tickmill.
“This decline could put strong pressure on the cryptocurrency and broader market sentiment, especially as Bitcoin fell below the USD 100,000 mark, indicating short-term volatility and downside risks,” he said.
The volatility is greatly exacerbated liquid in both long and short positions, totaling over $240 million within a 24-hour period. Antonio Di Giacomo, senior market analyst at XS.com, said, “The Federal Reserve's cautious stance in signaling fewer cuts for 2025 created a sense of doubt and speculation. “
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Looking forward, the sell-off in the digital currency market may continue in the near future. Alex Kuptsikevich, chief market analyst at FxPro, speculated that the total market capitalization of cryptocurrencies could fall below $3 trillion, down from a peak of $3.7 trillion earlier this month.
He warned that “a failure below $94,500 would signal a break of the increase of the past six weeks, and a drop below $92,000 would take the price below the 50-day moving average. In this case, time is on the side of the bears.”
As of this writing, Bitcoin has remained stable above $97,400 as the week ends, despite recording a 4% loss over the past 24 hours.
Featured image from DALL-E, chart from TradingView.com
