Bitcoin price rose above $70,000 on Tuesday, driven by significant inflows into US spot Bitcoin ETFs and weak US economic data that supported possible interest rate cuts by the Federal Reserve. Analysts are optimistic about new highs this week if current trends continue.
The crypto market is buzzing with excitement as Bitcoin breached the $70,000 mark on Tuesday, driven by improved risk appetite and significant inflows into US Bitcoin ETFs. Analysts are pointing to the possibility of new highs this week, especially if weak U.S. economic data continues to support the case for rate cuts by the Federal Reserve.
Rajagopal Menon, vice president of WazirX, pointed to the robust buying sentiment for Bitcoin and suggested that “Bitcoin could reach new highs this week if weak US economic data continues to emerge, supporting the case for two Federal Reserve rate cuts this year .”
Recent data pointed to a contraction in US economic growth, with declines in manufacturing and construction spending despite slight improvements in the labor market. This economic backdrop is influencing the Federal Reserve’s stance, with current interest rates expected to be maintained in June and July, and possible cuts in September.
US Bitcoin ETFs saw their second largest net inflows yesterday at $887 million, led by Fidelity Wise, BlackRock and ARK 21Shares. This surge in inflows reflects the growing interest in Bitcoin ETFs not only in the US, but also in markets such as Hong Kong and Australia. Menon added: “As long-term holders ended their sell-off, Bitcoin exchange funds saw net inflows of $148 million last week, while Ethereum attracted $33.5 million.”
The CoinSwitch Markets Desk highlighted the continued bullish sentiment in the market, noting that Bitcoin ETFs have seen 15 consecutive days of net inflows. “BlackRock’s iBit now has more than $20 billion in assets under management, including $2.4 billion in the last month alone, making it the third largest inflow in the entire ETF market,” the report said.
Shivam Thakral, CEO of BuyUcoin, highlighted the role of institutional investors in Bitcoin prices rising. “The spot ETFs added $2.4 billion in assets last month. Strong demand from institutional investors is currently driving Bitcoin prices and positive macroeconomic factors will help the crypto market maintain momentum in the coming weeks,” said Thakral.
Wider movements
Bitcoin’s rise has had a ripple effect on the crypto market. Binance’s native token, BNB, hit an all-time high after gaining more than 11 percent following news that former CEO CZ had begun his prison sentence in California. Additionally, Telegram’s TON coin also hit an all-time high, with the original token NOT quadrupling in value within two weeks of listing.
The June 5, 2024 CoinDCX Market Movement report noted that Bitcoin reached $71,000, while ETF inflows exceeded $800 million, the highest since March 12. Financing rates are still neutral, which is technically positive. However, there were also warnings about the potential for a local summit, as was visible in mid-March.
Ethereum, while experiencing a slight increase, continues to underperform compared to Bitcoin, which is currently trading above $3,800. Despite this, most altcoins are showing signs of recovery and positive movement.
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