(Kitco News) – Bitcoin (BTC) looked to get back on track in early trading on Monday following Friday’s five percent dip, followed by sideways trading above $69,000 over the weekend.
The decline “coincided with the liquidation of long positions valued at over $300 million, spurred by the release of robust nonfarm payroll data,” said analysts at secure digital markets. “Moving forward, the market's attention turns to significant macroeconomic indicators such as the Consumer Price Index (CPI) and the Federal Reserve's interest rate decision on Wednesday, along with the Producer Price Index (PPI) scheduled for Thursday.”
“Presently, market sentiment leans towards no rate cuts in the summer, with the likelihood of the first cut in either September or November estimated at 47%,” they noted.
Inflows into spot Bitcoin exchange-traded funds (ETFs) continue to provide a tailwind for the market as Friday saw a $131 million flow into ETF coffers, the 19th consecutive day of inflows.
A total of $1.83 billion flowed into the U.S.-listed BTC ETFs last week, while globally listed digital asset investment products recorded net inflows of $2 billion, bringing the recent 5-week run of inflows to $4.3 billion, according to James Butterfill, Head of Research at CoinShares.
“Unusually, inflows were seen across almost all providers, with a continued slowdown in outflows from incumbents,” Butterfill said. “We believe this turn around in sentiment is a direct response to weaker than expected macro data in the US, bringing forward monetary policy rate cut expectations. Positive price action saw total assets under management (AuM) rise above the US$100bn mark for the first time since March.”
“Bitcoin was again the primary focus, seeing US$1.97bn inflows for the week, while short-bitcoin saw outflows for the 3rd week in a row totalling US$5.3m,” he added. “Ethereum saw its best week of inflows since March, totalling US$69m, likely in reaction to the surprise SEC decision to allow spot-base ETFs.”
According to network economist Timothy Peterson, the pace of inflows into spot BTC ETFs has put King Crypto on track to hit a new all-time high by July 31 if the present pace keeps up.
ETF Fund flows put #Bitcoin on track for new ATH within 60 days. pic.twitter.com/7wKpSpgQ4B
— Timothy Peterson (@nsquaredvalue) June 10, 2024
Peterson’s projection also predicts a $135,000 BTC price by year-end if flows continue at their current rate.
“BTC's integration into traditional finance continues to expand worldwide,” said Matteo Greco, Research Analyst at Fineqia International. “Following the launch of the first BTC Spot ETF in Australia, the Thailand Securities and Exchange Commission (SEC) recently approved One Asset Management to introduce Thailand's first BTC Spot ETF.”
U.S. stock futures declined before the opening bell as traders await the Federal Reserve’s decision on interest rates. The market predicts a 99.4% chance that rates will be held steady.
“Wednesday's events, featuring the Fed's rate announcement and May's CPI figures, stand as pivotal moments for market dynamics, particularly in light of the recent strong jobs report suggesting a potential delay in rate cuts by the central bank,” analysts at Secure Digital Markets said. “The recent rate cuts by the European Central Bank and the Bank of Canada have set a precedent, initiating what is colloquially termed as an ‘easing cycle’ among the Group of Seven (G7) nations.”
“Despite inflation still being above the 2% annual target set by these central banks, the rate cuts signal positive expectations from governments about their ability to control inflation while promoting less restrictive monetary policies,” said Greco.
“Less restrictive monetary policies are generally favourable for risk-on assets such as stocks and digital assets, especially when rate cuts do not foreshadow an impending recession,” he added. “In this case, the central bank's decision to cut rates despite higher-than-target inflation suggests optimism about managing inflation and maintaining it near desired levels even with more expansionary monetary policies.”
According to Ash Crypto, Bitcoin whales have taken the cue of less restrictive monetary policies to open a large number of long positions. The last time they did this, Bitcoin’s price enjoyed a 155% rally.
? BREAKING ?
BITCOIN WHALES HAVE OPENED GIGA LONG POSITIONS ON BYBIT AND OKX
LAST TIME, THIS HAPPENED WHEN BTC WAS AT $29K, WHICH RESULTED IN 155% PUMP pic.twitter.com/RGEMTaUgvl— Ash Crypto (@Ashcryptoreal) June 10, 2024
At the time of writing, Bitcoin trades at $69,905, an increase of 0.36% on the 24-hour chart.
BTC/USD Chart by TradingView
