The cryptocurrency market is in the red today, with most of the top 100 cryptocurrencies reflecting losses over the past 24 hours. Notably, only six altcoins, including two stablecoins, maintained positive performance amid the widespread market sell-off.
Several complex and intertwined factors contributed to the day’s negative market sentiment, impacting major cryptocurrencies. In the last 24 hours, Bitcoin price fell 4.2%, Ethereum fell 5.0%, Solana fell 8.7%, XRP fell 4.7%, and Dogecoin fell 8.3%.
#1 Ongoing macroeconomic uncertainty
A key factor influencing market trends today is changes in the macroeconomic environment, particularly related to U.S. interest rates and inflation expectations. At the beginning of the year, the market expected aggressive monetary easing from the Federal Reserve. However, sentiment has shifted significantly following recent data and signals from the Federal Reserve.
“Markets are pricing in fewer rate cuts this year compared to the Fed’s dot plot forecast, which calls for three rate cuts by the end of the year. The implied federal funds rate rose to 5.0% in December, indicating that the futures market is pricing in just one or two rate cuts.” Cetera Investment Management decided Via X (formerly Twitter).
All eyes this week are on the release of the March Personal Consumption Expenditures (PCE) price index. This is the Fed’s preferred measure of inflation and will be released on Friday, April 26 at 8:30 a.m. EDT. Until then, markets may be in risk mode.
The PCE is expected to provide a divergent view of inflation trends, which could strengthen the Fed’s inclination to delay raising interest rates. Analysts expect the overall PCE price index to rise slightly to 2.6% year-on-year from 2.5% in February. They also expect the monthly change in the index to decrease from 0.33% to 0.30%.
#2 Cryptocurrency market shocked by legal action against Samurai Wallet
Cryptocurrency markets were rocked by yesterday’s legal developments involving the Samourai Wallet. The decision by U.S. federal prosecutors to charge founders Keonne Rodriguez and William Lonergan Hill with money laundering and operating an unlicensed money transfer business sent waves through the cryptocurrency community. This action highlights the ongoing regulatory scrutiny within the cryptocurrency space.
The indictment of the Samourai Wallet founder not only raises questions about the future of cryptocurrency privacy, but also has a significant impact on market sentiment as it highlights the legal risks inherent in the cryptocurrency sector. The implications of this case go beyond the immediate legal issues and impact broader market perceptions and investor confidence.
#3 Bitcoin and cryptocurrencies are “just broad”
Additional insights into market dynamics come from prominent cryptocurrency analysts who commented on market liquidity conditions and trader behavior. “The market has gifted us with a beautiful reset in Bitcoin trader positioning. OI-weighted funds turned negative for the first time since October 2023. That was before Bitcoin jumped from 27,000 to 46,000 without any meaningful decline.” said Ted, X’s cryptocurrency analyst.
This reset would mean a reduction in overheated futures markets, allowing the market to consolidate and potentially build the foundation for a future upward move.
Another cryptocurrency analyst, Emperor, described the current market state in a series of tweets, highlighting the highs following the ongoing consolidation phase. He said: “There’s still too much panic in the timeline, but we’ve been broadening the scope since ATH. That’s all.”
He said, “The bearish/bullish line is an important resistance + point of control (PoC) in our range. If it recovers to level 1, we expect VaL (Value Area Low) to maintain a pullback and VaH (Value Area High) to become the next target for buying.”
Bitcoin price update
There are still too many upsets in the timeline, but we’ve been running since ATH. That’s all
1. The bearish/bullish line is an important resistance + point of control (PoC) in our range.
VaL (Value Area Low) maintains a downward trend and VaH (Value Area High)… pic.twitter.com/4UTExqQv0n— Emperor🌻 (@EmperorBTC) April 24, 2024
#4 Bitcoin ETF Still Quiet
Yesterday ETF flows were negative again. Only Fidelity’s FBTC and Ark Invest’s ARKB saw minimal inflows. GBTC again sold more at -$130.4m and BlackRock had zero inflows for the first time since its inception on January 11. Thus, BlackRock’s (IBIT) inflow streak ended at 70 days. Prior to this, IBIT entered the top 10 of all time, beating ETFs such as JETS, BND, and VEA.
Yesterday’s ETF flows were as follows: @FarsideUK.
We’re back to the spill and of course it’s Barry.
Yesterday we recorded an outflow of $120.6 million.$GBTC There was an outflow of $130.4 million.Blackrock had zero. This means that for the first time, after 70 days, there were no inflows at all.
price… pic.twitter.com/Akh1agezb6
— Whale Panda (@WhalePanda) April 25, 2024
In particular, momentum for spot Bitcoin ETFs has weakened significantly over the past two weeks. The last notable inflow was on March 26, almost a month ago, when it topped $400 million. On the bright side, despite this slowdown, there were no outflows from BlackRock or Fidelity. Grayscale’s GBTC remains the main negative driver of outflows.
Moreover, willingness to invest appears to be decreasing among traditional sector investors. Total inflows through ETFs have been stagnant for over 30 days, consistent with a flat trend in Bitcoin price.
At press time, BTC was trading at $64,034.
Featured image from Shutterstock, chart from TradingView.com
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