The cryptocurrency market's total value declined from $2.34 trillion to $2.20 trillion, prompting concerns as crypto bulls struggled to maintain control. Significant liquidations totaling $470 million occurred alongside a drop in Bitcoin's price to $57,000 on Wednesday, marking a 9% decrease within 24 hours and a 13% decline over a week. The Crypto Fear and Greed Index also fell from 67 (indicating greed) to 54 (neutral) within a day. Investors anticipate further declines, with predictions suggesting Bitcoin could reach $47,000.
Bitcoin and cryptocurrency prices saw a decline amid growing concerns that US interest rates might remain elevated leading up to the Federal Reserve's May 1 monetary policy decision. Investors received signals suggesting a more hawkish stance from the Fed, indicating a possible continuation of interest rates between 5.25% to 5.50%. While Chairman Jerome Powell had previously suggested the potential for three interest rate cuts, indications now suggest fewer cuts this year. The latest Personal Consumption Expenditures (PCE) data highlighted ongoing inflationary pressures, while the first-quarter GDP growth of 1.6% indicated a scenario of stagflation. Predictions from the market anticipate only one Fed interest rate cut this year, a factor contributing to negative sentiment surrounding cryptocurrency prices.
The US Dollar Index surged to a six-month peak, hitting 106.45, while the US 10-year Treasury yield rose to 4.688%. These upward movements suggest inflationary pressures impacting Bitcoin's price. Investors are eagerly anticipating the Treasury's repayment announcement for the second quarter of 2024, which might prompt some rebound in Bitcoin.
The US BTC ETF didn't provide support on Tuesday, experiencing a $161 million outflow amid a significant Wall Street correction. ETFs saw outflows for five straight days. In Hong Kong, the six spot Bitcoin and Ethereum ETFs had a trading volume of just $12 million on their first day, significantly lower than the initial issuance of US Bitcoin ETFs. #BTC #eth
