Original author: Mary Liu
Original source: BitpushNews
Financial market volatility increased on Wednesday as investors continued to weigh mixed signals about the state of the U.S. economy. Federal Reserve Chairman Jerome Powell reiterated in a speech at Stanford University on Wednesday that there is no rush to cut interest rates until there is more confidence that inflation is falling consistently to 2%.
Major U.S. stock indexes opened higher and ended lower on Wednesday, with the S&P and Nasdaq rising 0.11% and 0.23% respectively, while the Dow fell 0.11%. In the crypto market, Bitcoin fell from an intraday high of $66,940 to a low of $64,520, and recovered to around $65,680 by the close of the U.S. stock market, with a 24-hour volatility of less than 1%.
Altcoin trading was mixed, with most coins in the top 200 posting losses. Bitcoin Cash (BCH), the 14th largest cryptocurrency, completed its block reward halving, but the price was still down 10% on the day to $572, well below its all-time high of around $4,355 set in 2017.
The newly launched stablecoin protocol Ethena (ENA) was the top gainer, with an increase of 34.2%. ENA began trading on April 2, with an initial price of approximately US$0.60. It is currently trading at US$1.15, with a market value of US$1.6 billion. The project has also Backed by former BitMEX CEO Arthur Hayes. Hayes said he expects the price to rise to $10.
Other top gainers include Jito (JTO), up 21%, and IoTeX (IOTX), up 20.8%. Memecoin (MEME) was the biggest loser, down 14.3%, Pendle (PENDLE) fell 13.8%, and Core (CORE) fell 13%.
The current overall market value of cryptocurrency is US$2.48 trillion, and Bitcoin’s dominance rate is 52.2%.
Spot Bitcoin ETFs see net outflows
Inflows into new spot Bitcoin ETFs have been subdued for weeks, which could prompt renewed interest in macro drivers of price direction.
Most of Bitcoin's rise in 2024 roughly occurred from mid-February to mid-March. During the same period, spot ETFs saw a daily net increase of approximately 5,000-13,000 Bitcoins. However, since then, GBTC has continued to flow out, while other ETFs have The pace of accumulation has slowed, and overall net flows have turned negative. Meanwhile, Bitcoin’s price is down about 10% from its March 12 record of nearly $73,500.
Data from SoSoValue shows that the ARKB fund owned by Ark Invest/21Shares saw a net outflow of $87.5 million on Tuesday, the highest level since its launch. This amount exceeded the outflow of Grayscale GBTC, which had an outflow of $81.9 million that day. .
US inflation rebounds
Inflation, which had been steadily declining throughout 2023 in the United States, actually increased in the first few months of 2024. Inflation was 3.2% in February, still well above the Fed's 2% target. Meanwhile, the economy appears to be continuing to grow steadily, adding more than 200,000 jobs a month so far this year, and the unemployment rate remains near historic lows, according to government statistics.
Earlier Wednesday, ADP reported that private payrolls rose by 184,000 in March, up from 155,000 in February and expectations for 148,000. The main event on the employment front will be the government's non-farm payrolls report on Friday morning, with economists expecting an increase of 200,000.
Recent strong data has pushed the 10-year U.S. Treasury yield to a 2024 high of 4.43% and the dollar to its highest level since November, both of which could curb the prices of risky assets, including Bitcoin.
Semir Gabeljic, executive at Pythagoras Investments, said: "Bitcoin's fall back to $65,000 is mainly attributed to the near-term macro outlook for interest rates and rising Treasury yields. A higher interest rate environment generally reduces investors' risk appetite."
Bitcoin's big pullbacks often occur in the middle of a bull market
Long-time cryptocurrency trader Koroush AK has provided his insights into market conditions, noting that Bitcoin is prone to large corrections in the middle of a bull market.
He said: "Expect prices to fall as low as $62,000, trading in this range will become more difficult and altcoins will be easier. The isolated altcoin narrative is expected to continue, and even if we enter a more neutral environment in a few weeks, the market sentiment and high time frame structure are still bullish, and my plan is still the same, buy on dips."
Cryptocurrency futures rates and open interest declined, with Jun-Young Heo, a derivatives trader at Presto in Singapore, adding: “Perpetual futures funding rates for most crypto assets are back to 1 basis point, and global futures open interest fell 10% overnight, indicating some leveraged long positions were liquidated.”
Jun-Young Heo said: “With recent Bitcoin ETF inflows stalling and BTC and ETH market prices below the 20-day moving average, some trend followers may view yesterday’s downturn as a pause in the two-month-long rise.” .
Justin d'Anethan, head of business development for Asia Pacific at Keyrock, said in an interview with The Block that the Bitcoin halving, expected to occur later this month, has historically been a bearish event but is followed by a long-term bullish cycle.
