Traditional US stock markets were closed on Friday, but the cryptocurrency market remained active. Federal Reserve Chairman Jerome Powell delivered a speech in San Francisco, emphasizing the strength of the US economy and the expectation of strong growth. He acknowledged that risks are two-sided and reiterated the Fed’s commitment to closely monitoring economic data. Powell did not mention any interest rate cut plans for this year, emphasizing that “premature rate cuts would bring significant disruption.”
After Powell’s speech, the cryptocurrency market quickly retreated. Bitcoin fell below $70,000, Ethereum fell below $3,500, SOL and ADA fell 1%, while Bitcoin Cash (BCH) rose 4%, continuing its upward trend from Thursday.
Led by Solana ecosystem Dogwifhat (WIF), meme coins continued to surge for the second consecutive day, leading the meme sector. Market data shows that WIF has surpassed pepecoin (PEPE) to become the third largest meme token by market capitalization, with a trading price of over $4, reaching $4.16 at the time of writing, with a 7-day increase of nearly 90%.
CoinMarketCap data shows that meme coins have surged an average of 8%, surpassing mainstream sectors such as DEFI and platform tokens. Betting on DOGE futures has soared to a record $2 billion, indicating a bullish expectation for future price fluctuations.
Recently, $1.4 billion USDC was transferred to Coinbase, attracting attention from the community. Some analysts pointed out that the influx of funds into exchanges may indicate that the bulls are ready to inject funds, which could benefit tokens such as Bitcoin and Ethereum.
The large USDC transfers to Coinbase and the rise in prices are traceable. Analysts pointed out that in January 2023, before the price surge, $1.3 billion USDC flowed into Coinbase, and then BTC rose from around $16,300.
However, it should be noted that the fact that $1.4 billion USDC flowed into Coinbase cannot be the main driving force. The Bitcoin and Ethereum markets already have deep liquidity, and market sentiment or the influx of funds from institutions are the main driving factors of prices.
Funds have continued to flow into spot Bitcoin ETF for the fourth consecutive day, and the closing of this month has been strong. According to data from SoSo Value, as of March 28, the daily net inflow of US spot Bitcoin ETF was $183 million, with a total net inflow of approximately $12.13 billion. iShares Bitcoin ETF, owned by BlackRock, saw the highest net inflow of $95.12 million, while Fidelity Wise Origin Bitcoin Fund saw a net inflow of $69.09 million. On the other hand, the net outflow of Grayscale Bitcoin Trust Fund continues, with nearly $105 million flowing out of the product.
According to data from The Block, as of March 27, the cumulative trading volume of US spot Bitcoin ETFs reached $177.9 billion. Since reaching its peak earlier this month, the management assets and on-chain holdings of US spot Bitcoin ETFs have stabilized.
CoinGlass data shows that the Bitcoin futures open interest on centralized exchanges has reached a new high of $38 billion. Open interest is an indicator that measures the total value of all outstanding or “unsettled” Bitcoin futures contracts on various exchanges, indicating increased market activity and trader sentiment around BTC.
Bitcoin encountered resistance at $70,000 due to various factors, including reduced activity from institutional traders due to non-trading days in the US and the UK. Market analysts are closely watching key levels such as $69,500 and $68,500, as a failure to find significant support at these levels could trigger a broader correction.
Meanwhile, some trading firms have warned that recent gains may retreat as Bitcoin and Ethereum prices show signs of weakness. QCP Capital, headquartered in Singapore, stated in a Telegram update on Friday: “Prices have risen exponentially in the first quarter and show signs of weakness. ETH risk reversal is downward, at -8%, indicating some concerns. Funds and forward contracts are still high, which means that speculators are still paying a high price to maintain leveraged long positions.” The company concluded, “While we remain bullish, we remain cautious about leverage.”
Acheron Trading CEO Laurent Benayoun remains optimistic about the future of Bitcoin, expecting the current bull market cycle to be further extended with target prices between $120,000 and $180,000. Benayoun attributes this potential surge to various catalysts, including the launch of Bitcoin exchange-traded funds, the upcoming Bitcoin halving event, and potential interest rate cuts.
Bitwise Chief Investment Officer Matthew Hougan advises investors to remain calm and take a long-term view. In an interview with Bloomberg, Hougan stated that if global wealth management institutions allocate just 1% of their portfolios to Bitcoin, it could result in a massive influx of around $1 trillion into the cryptocurrency space. This view highlights the increasing recognition by institutional investors of the value proposition of Bitcoin and further fuels optimism about its future trajectory.