Bitcoin price stayed nearly flat on Monday after a sharp fall over the weekend saw the cryptocurrency pull back from recent highs, with focus squarely on more key signals on U.S. interest rates.
The world’s largest cryptocurrency had pushed as high as $72,000 last week, coming within spitting distance of record highs hit in March. But it then saw a heavy dose of profit-taking and weakness from Friday after the dollar rebounded.
Bitcoin fell 0.3% over the past 24 hours to $69,446.5 by 08:51 ET (12:51 GMT).
Bitcoin price steadies with Fed meeting, CPI in focus
Bitcoin’s weekend decline came at the heels of a hotter-than-expected nonfarm payrolls reading, which saw traders largely rethink recent bets that the Federal Reserve will begin cutting rates in September.
This notion boosted the dollar, which in turn weighed on broader crypto prices.
The payrolls reading also put an upcoming Fed meeting in focus, with the central bank widely expected to keep rates steady at the conclusion of a two-day meeting on Wednesday.
But the Fed’s outlook on rates will be closely watched.
Before the Fed rate decision, consumer price index inflation data is also due on Wednesday. The reading is expected to show inflation remaining well above the Fed’s 2% annual target, giving the central bank little confidence to begin trimming rates.
High-for-longer rates bode poorly for Bitcoin and broader cryptocurrencies, given that the sector usually benefits from increased liquidity and loose lending conditions.
Crypto price today: Altcoins largely in red
Broader crypto markets were also nursing steep losses from over the weekend, as fears of high rates weighed on the sector. They were also hit by profit-taking after some gains through May.
World no.2 token Ether slipped by 0.6% to $3,680.27 on Monday after losing nearly 4% on Friday.
XRP, SOL and ADA rose 0.7% and 0.1%, respectively, while Solana fell 1.5%. Among meme coins, Investing.com Shiba Inu Index and DOGE/USD slid 1.3% and 1.8%, respectively.
Bitcoin ETFs saw weekly inflows of $2bn; ETH could hit $10K in 2024, traders say
Crypto investment products saw nearly $2 billion in inflows last week, extending a five-week streak to over $4.3 billion, asset manager CoinShares said in a Monday report.
Trading volumes in exchange-traded products (ETPs) surged to $12.8 billion for the week, a 55% increase from the previous week. Bitcoin led the way with inflows of over $1.97 billion, while ether experienced its best week since March with nearly $70 million in inflows.
The interest in spot bitcoin exchange-traded funds (ETFs) in the U.S. has picked up since mid-May after a sluggish April, which saw zero net inflows on some days and even outflows from major products like BlackRock (NYSE:BLK)’s IBIT. Since then, inflows have surged, making IBIT the largest bitcoin ETF, accumulating over $20 billion in assets since its January launch.
“Unusually, inflows were seen across almost all providers, with a continued slowdown in outflows from incumbents,” said CoinShares’ note. “Positive price action saw total assets under management (AuM) rise above the $100 billion mark for the first time since March this year.”
Butterfill noted that the increased buying of ETH was likely in response to the unexpected SEC decision to allow spot ether ETFs.
In the meantime, some traders anticipate that inflows into ETH products will continue in the coming months, with a potential rally expected toward the end of the year.
“$5-10 billion of fresh capital could be channeled through ether products in the short to medium term,” digital asset manager Tyr Capital reportedly told CoinDesk. “This could fuel an end-of-year rally in ETH and its ecosystem to new record highs.”
“A price target of $10,000 in 2024 is now a reasonable target especially when other supportive factors, like ETH now being deflationary, are taken into consideration,” it added.
