The crypto market is in the red today, with most of the top-100 cryptocurrencies showing losses over the past 24 hours. Interestingly, only six altcoins, including two stablecoins, have managed to maintain positive performance during the broader market selloff.
A number of complex and intertwined factors contributed to the day’s negative market sentiment, affecting major cryptocurrencies. Over the past 24 hours, Bitcoin has fallen by 4.2%, Ethereum by 5.0%, Solana by 8.7%, XRP by 4.7% and Dogecoin by 8.3%.
#1 Persistent macroeconomic uncertainty
A primary factor influencing today’s market movements is the evolving macroeconomic landscape, particularly related to US interest rate and inflation expectations. At the start of the year, markets expected aggressive monetary easing from the Federal Reserve. However, sentiment has largely changed based on recent data and Federal Reserve signals.
“Markets are pricing in fewer rate cuts for this year compared to the Fed’s dot plot projection of 3 rate cuts by the end of the year. The implied Fed Funds rate for December rose to 5.0%, indicating that the futures market is in for only a 1 to 2 rate cut,” Cetera Investment Management said By X (formerly Twitter).
This week, all eyes are on the release of the Personal Consumption Expenditure (PCE) price index for March – the Fed’s preferred inflation measure – at 8:30 a.m. EDT on Friday, April 26. By then the market may be in derisk mode.
The PCE is expected to present a different view of inflation trends, which could strengthen the Federal Reserve’s inclination to delay any increase in interest rates. Analysts had forecast a slight increase in the overall PCE price index, rising to 2.6% year-over-year from 2.5% in February. Additionally, they expect a decline in the index’s month-on-month change, falling from 0.33% to 0.30%.
#2 Legal action against Samurai wallet shocks the crypto market
Yesterday’s legal developments involving Samurai Wallet have also shaken the crypto market. US federal prosecutors’ decision to charge founders Keonne Rodriguez and William Lonergan Hill with money laundering and operating an unlicensed remittance business has sent shockwaves through the crypto community. The move underscores ongoing regulatory scrutiny in the crypto space.
The lawsuit against the founders of Samurai Wallet not only raises questions about the future of cryptographic privacy, but also significantly affects market sentiment as it highlights the legal risks inherent in the crypto sector. The implications of this case extend beyond immediate legal concerns, influencing broader market perceptions and investor confidence.
#3 Bitcoin and crypto are “just ranging”.
Further insights into market dynamics come from prominent crypto analysts who comment on the state of market liquidity and trading behavior. “The market has gifted us with a beautiful reset in trader positioning for Bitcoin. OI-weighted funds turned negative for the first time since October 2023. Before Bitcoin reached 27k to 46k without any meaningful dip,” said Ted, a crypto analyst at X.
This reset is a decline in an overheated futures market, allowing the market to consolidate and potentially form the basis for future upward moves.
Emperor, another crypto analyst, has been describing current market conditions through a series of tweets, highlighting the ongoing consolidation phase after the highs: “Still a lot of panic on the timeline but we’re ranged from the ATH, that’s all.”
He added, “The bear/bull line is an important resistance + point of control (PoC) in our range. VaL (Value Area Low) is expected to hold on to the pullback and VAH (Value Area High) will be the next target on longs, if we reclaim Level 1.”
Bitcoin price update
There’s still a lot of jitters on the timeline but we’ve ranged from ATH, that’s all
1. The bear/bull line is an important resistance + point of control (PoC) in our range.
Expecting VaL (Value Area Low) pullback and VaH (Value Area High) to hold on… pic.twitter.com/4UTExqQv0n— Emperor (@EmperorBTC) 24 April 2024
#4 Bitcoin ETFs remain muted
ETF flows were again negative yesterday. Only Fidelity’s FBTC and Ark Invest’s ARKB had minimal flows. GBTC sold again at -$130.4m and had zero flows for the first time since BlackRock was founded on January 11th. Thus, BlackRock’s (IBIT) inflow streak ended after 70 days. Earlier, IBIT entered the all-time top 10 after passing ETFs like JETS, BND and VEA.
Yesterday’s ETF flows @FarsideUK.
We’re back at Outflow and of course it’s Barry.
Yesterday we had an outflow of $120.6 million.$GBTC $130.4 million in outflows.Blackrock had 0. This means that for the first time after 70 days they have had no flow.
price… pic.twitter.com/Akh1agezb6
— whalepanda (@whalepanda) 25 April 2024
Notably, spot bitcoin ETFs have slowed significantly over the past two weeks. The last notable day of the stream was March 26, when they crossed $400 million about a month ago. On the bright side, despite this downturn, neither BlackRock nor Fidelity have seen any outflows. Grayscale’s GBTC remains the primary negative factor driving outflows.
Furthermore, investment appetite among traditional sector investors appears to have waned; Total inflows through ETFs have been stable for more than 30 days, a flat trend in Bitcoin prices.
At press time, BTC traded at $64,034.
Featured image from Shutterstock, chart from TradingView.com
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