After a period of dominance by sellers in the cryptocurrency markets, a shift in investor sentiment is on the horizon. The completion of the Federal Reserve meeting has somewhat relieved the risk pressure on investors, as evidenced by the recent resurgence of Bitcoin‘s price to a notable $68,100. This upward trend raises questions about the state of spot Bitcoin Exchange Traded Funds (ETFs).
Spot Bitcoin ETF Trends
Bitcoin price volatility earlier threatened to plunge the currency to $60,000, coinciding with an increase in spot Bitcoin ETF outflows. Nevertheless, Bitcoin’s rebound to over $67,700, and a subsequent peak at $68,100, is reflecting positively on ETF movements. The initial outflows from the Grayscale Bitcoin Trust (GBTC) began at an alarming $642 million at the week’s start, then decreased to $443 million, and further to $386.6 million by March 20th.
Investor Sentiment and Cryptocurrency Outlook
Investor concerns were apparent during the Fed meeting, particularly regarding potential interest rate hikes premised on early 2023 inflation data. However, Fed Chairman Powell hinted at the possibility of an interest rate cut in the upcoming months, contingent on easing inflation and employment trends. This has led investors to speculate on a change in market direction, as Bitcoin’s price surge suggests a renewed confidence following the Fed meeting, potentially reversing the trend of net outflows.
Market observers note the slowdown in GBTC outflows may coincide with an uptick in other ETFs, suggesting a potential decline in cumulative outflows. If investor appetite in the ETF channel echoes the positivity in spot markets, we could witness a momentum shift toward the $70,000 mark for Bitcoin. Current market indicators, such as a decreasing Dollar Index (DXY), rising Bitcoin prices, and a buoyant stock market, point to a short-term alleviation of investor fears.
