Why is Bitcoin stuck at the price range of 52,000 USD/BTC?
Bitcoin price stuck at $52,000/BTC amid disappointing US macro data and market worries about whether the Fed will loosen monetary policy this year
Bitcoin is stagnant
Bitcoin (BTC) price is forming resistance at $52,000/BTC amid the latest US macro data falling short of expectations. Data from TradingView shows that BTC price action has been stagnant during the weekend trading session.
Following the "hotness" of the US Consumer Price Index (CPI) announced earlier, the numbers on the Producer Price Index (PPI) in January also added to the headache of US inflation. . Compared to the same period last year, PPI reached 0.9% - slightly lower than the previous month but still 0.3% higher than market forecast.
With these results, the market is even more worried about whether the US Federal Reserve (Fed) can loosen monetary policy this year? According to data from CME Group's FedWatch Tool, the odds of the Fed cutting interest rates at the next March meeting are currently 8.5%, less than half the 17.5% chance at the beginning of the week.
The Kobeissi Letter - a website specializing in providing commentary on global capital markets - wrote in a response on social network may be completely ruled out following newly published data.
Bitcoin itself had reached 52,884 USD/BTC on Bitstamp a day earlier, its highest level since late November 2021, but the market could not avoid strong pressure from sellers. However, the bright spot is that US Bitcoin ETFs saw net inflows of nearly half a billion USD on February 15. This contributed to an impressive week as ETF products saw a “second wind” of increased investor interest more than a month after launch.
In its latest analysis, platform CryptoQuant sees slowing interest in ETFs as it could leave Bitcoin vulnerable to a major pullback. The company has outlined potential BTC price floors that could occur, even being pulled down to $34,000/BTC.
The market aims to approve an Ethereum ETF
After the wave of Bitcoin ETFs, the cryptocurrency market is starting to move towards adopting Ethereum (ETH) ETFs as the next target. Sharing on Cointelegraph, Mr. Lucas Kiely, former chief investment officer at Diginex Asset Management, said that the approval of an ETH ETF is now not only certain but also imminent.
Currently, there are seven ETH spot ETF applications under review by the US Securities and Exchange Commission (SEC). This time, VanEck - an American investment management company headquartered in New York will be the first organization to receive an answer, the deadline is May 23, 2024. Additionally, BlackRock's application deadline will be in August. According to the expert, the only potential obstacle in the process of spot ETH approval is liquidity. Like the concerns with Bitcoin spot products before, this is even more important for Ethereum, where the move to proof-of-stake has further limited the supply of ETH to the market
Furthermore, while BTC is currently used almost entirely as a store of value, which can be held long-term in large investment funds, ETH is the currency primarily used for payments transaction fees on blockchains. It could hamper the world's second-largest cryptocurrency's performance when it comes to spot ETF approval, but it's still a huge opportunity.
“The reason it took 10 years to get a Bitcoin ETF approved is because the politics are plain and simple. The SEC was not willing to guarantee until asset managers were certain that this new asset class would be approved.
With the approval of the Bitcoin ETF, the cryptocurrency not only slipped through the important doors of traditional finance, but also maintained its position. Accordingly, in addition to the approval of additional ETH ETFs, we can prepare for the implementation of ETFs on many other coins in the cryptocurrency industry," said the former investment director at Diginex Asset Management.
