On Thursday, the financial market rebounded from the pullback caused by yesterday’s Federal Reserve interest rate decision. The US stock market and the cryptocurrency market rose, while the US dollar index and the US 10-year Treasury yield fell. At the close, the S&P, Dow Jones, and Nasdaq indices rose by 0.91%, 0.85%, and 1.51% respectively. The US dollar index fell by 0.38%, and the 10-year Treasury yield fell by 105 basis points to 4.583%.
According to data from Bitpush, Bitcoin rallied from the support level of $57,000 and reached a high of $59,590 in the afternoon before falling back to the support level of $59,000. At the time of writing, the BTC trading price was $59,090, up 3.2% in the past 24 hours.
The altcoin market generally recovered, with all tokens except a dozen of the top 200 tokens recording gains. Arweave (AR) had the highest increase, rising by 22.6% to $34.88, followed by Jito (JTO) with a 15.4% increase, and Centrifuge (CFG) with a 13.75% increase. Among the tokens that fell, ZetaChain fell by 11.4%, Heder (HBAR) fell by 4.11%, and Nervos Network (CKB) fell by 2.7%.
The total market capitalization of cryptocurrencies is currently $2.21 trillion, with Bitcoin’s dominance rate at 52.7%.
A report released by JPMorgan stated that due to the lack of positive catalysts and the disappearance of retail enthusiasm, it is advised to maintain a cautious stance on the cryptocurrency market in the short term. The report mentioned that in recent weeks, there has been a significant profit-taking in the market, and retail investors have played a larger role in the sell-off than institutional investors.
According to data from JPMorgan and Bloomberg, investors withdrew $558 million from the US spot Bitcoin ETF yesterday, marking the largest single-day outflow since the launch of the fund in mid-January. The outflow yesterday included a $167 million outflow from the Grayscale Bitcoin Trust, which has seen outflows exceeding $17 billion since its conversion to an ETF in January.
BlackRock’s iShares Bitcoin Trust recorded its first daily outflow of $36 million. Yesterday, the outflow from Fidelity’s Wise Origin Bitcoin Fund was $189 million, the largest outflow among its fund products.
As for institutional investors, analyst Nikolaos Panigirtzoglou stated that it was mainly momentum traders such as commodity trading advisors (CTAs) or other quantitative funds who took profits on their extreme long positions in Bitcoin and gold. However, the analysis of the futures market shows that the reduction in positions by institutional investors other than quantitative funds and commodity trading advisors is not as significant.
Analyst Bloodgood believes that the Federal Reserve’s statement yesterday emphasized the lack of further progress in achieving the 2% inflation target, but also pointed out that the risks to achieving the employment and inflation targets have been better balanced over the past year. This is a typical example of mixed signals, and the market has already priced it in. Bloodgood stated that before, it was discussed that if Bitcoin fell below the previous all-time high (around $69,000), we would see $60,000 fairly quickly, and then it was discussed that $60,000 must be maintained, otherwise BTC would test levels far below $60,000. He added that a series of lower highs and lower lows followed the collapse, driven to some extent by bearish ETF fund flows and a stock market decline. But regardless of the underlying story, what is important is the technical support level, and now the important thing is Bitcoin’s weekly closing price. A weekly closing price below $60,000 means that we are one step closer to the weekly support level of $51,800, and falling to this point means ultimate pain for the altcoin market.
Bloodgood added that on the other hand, if buyers intervene, this will be a false retracement, and we may see the price rebound significantly to $65,000. In any case, the future is an interesting moment.
Market analyst Rekt Capital pointed out that the current pullback is happening in the “danger zone (purple)” after the halving, and warned that based on historical price trends, further decline is still possible. Rekt Capital stated that Bitcoin is once again repeating the history of 2016, recently falling below the current re-accumulation range low. In 2016, this deviation was -17%, and as of 2024, this deviation is -6%. He added that the downward trend in 2016 “lasted about 21 days after the halving before turning upward,” which means that Bitcoin still has 8 days in the danger zone, so its price trend may continue to fluctuate.
Michaël van de Poppe, founder of MN Trading, agrees with this view and expects Bitcoin to consolidate in a range for a while. Although there may still be a 5-10% decline, “most of the decline has already ended.”
Author: BitpushNews Mary Liu
