Mateo Greco, Research Analyst, Listed Digital Assets and FinTech Investment Business Finekia International (CSE:FNQ).
Bitcoin (BTC) ended the week at around $65,650, down 5.3% from the previous week’s closing price of around $69,350. After a period of stability from Monday to Thursday, this week saw significant fluctuations, especially over the weekend. On Friday, BTC experienced a decline, dropping to $65,100. This negative trend continued through Saturday, hitting a weekly low of around $60,650, before rebounding and ending the week near $65,650.
The reason for the price drop over the weekend was Geopolitical tensions in the Middle East, market sentiment improved following the announcement of a suspension of hostilities between the countries involved. Additionally, all eyes are on the next halving event scheduled for the night of April 19th-20th. Previous halving events have historically resulted in a 9-12 month uptrend, but have often triggered short-term “selling the news” reactions around the event.
A combination of these factors likely contributed to the negative price movements observed over the weekend. This near-term bearish sentiment is also reflected in the week’s $85 million net outflows from Bitcoin Spot ETFs, following strong uptrends in both Q4 2023 and Q1 2024. This indicates an increase in profit-taking and investors’ caution.
Despite the recession, Transaction volume remains steady, the BTC Spot ETF has a weekly trading volume of approximately $16.2 billion, averaging $3.2 billion per day. The cumulative trading volume since its establishment has now reached approximately $212 billion, with an average daily trading volume of approximately $3.3 billion.
BTC continues to show resilience relative to the broader digital asset market, with the dominant metric measuring BTC’s market capitalization relative to the overall market capitalization of digital assets, currently at its highest since April 2021. It is 55.3%, which is the standard.
On the macroeconomic front, recent US inflation data exceeded expectations, leading to changes in market participants’ expectations for interest rate cuts in 2024. Initially, expectations were that the rate would be cut by at least 75 basis points (the equivalent of three 25 basis point rate cuts). At interest rate. However, the latest data shows that expectations are for a 25/50 basis point rate cut by the end of the year, with the first rate cut expected in the third quarter and a second rate cut likely towards the end of the year. be.
A sustained level of inflation above the central bank’s target could lead to a prolonged period of tight monetary policy. This may further contribute to the near-term challenges faced by risk-on assets, as investors rebalance their portfolios in response to revised medium-term expectations in the wake of the latest financial indicators.
Source: the-blockchain.com
