The price of Bitcoin have slipped to the $64k zone, against a robust dollar backdrop, as interest in spot BTC ETFs diminishes.
Bitcoin recent price drop is coming after the crypto asset had surged back to the $68k zone, in what looked like a resumption of the previous rally that saw the price trade at $73,000 earlier this month.
Experts suggest that BTC’s weak price action was likely due to the resurgence of the US dollar despite higher-than-expected inflation readings and the Swiss National bank announcing a surprise move to cut interest rates by 25 basis points.
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Also, report from Bloomberg, revealed that significant outflow from Bitcoin exchange traded funds (ETFs) impacted the price of BTC to decline, noting that ETFs notched its largest three-day outflow since the funds began trading on January 11, 2024.
Investment funds backed by Bitcoin recorded over $740 million in net outflows. The $1.4 billion in outflows from just the Greyscale Bitcoin (GBTC) and the slower rate of inflows into BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise origin Bitcoin Fund (FBTC), the second and third-largest spot Bitcoin ETFs in the market were the contributing factors.
According to JPMorgan strategists led by Nikolaos Panigirtzoglou, they disclosed that the sustained open interest in CME Bitcoin futures, coupled with declining ETF flows, are seen as significant bearish signals for Bitcoin’s price.
“The pace of net inflows into spot Bitcoin ETFs has slowed markedly, with the past week seeing a significant outflow. This challenges the notion that the spot Bitcoin ETF flow picture is going to be characterized as a sustained one-way net inflow,” they said in a note published on Thursday.
Bitcoin has experienced a pullback of over 10% from its all-time high, with the demand for spot Bitcoin exchange-traded funds (ETFs) showing signs of moderation, while analysts at JPMorgan Chase and Co. have cautioned that this retreat may have more room to run.
They have reiterated their belief that Bitcoin still appears overbought, renewing a prediction made in February that further declines could occur leading up to the highly-anticipated halving event in April.
Also commenting on Bitcoin’s price drop, prominent stockbroker and Gold investor, Peter Schiff argued that the decline in BTC will continue. While the decline in Bitcoin reached the level of $ 63,000, he noted that there is now only one question in mind, “Will the decline in BTC continue?”
While the answer to this question is yes, according to some analysts, others say that Bitcoin will continue to rise where it left off. Schiff, who is not a fan of Bitcoin and argued that the decline will continue.
Sharing on account X, he referred to the enthusiasm during the rise in 2021 and pointed out that BTC experienced a major collapse after this enthusiasm.
Despite BTC reaching a record high of nearly $73,798 on March 14, enthusiasm among retail traders may be waning as there are concerns that a heavy dump will likely occur, leading to a price correction of -25% to -35%.
However, some analysts remain optimistic about the long-term prospects of the crypto market, citing growing institutional interest and adoption as key drivers of future growth
Despite the recent slide in Bitcoin prices, investment firm Bernstein has raised its year-end forecast for the cryptocurrency. In a research note, Bernstein revised its price target for Bitcoin to $90,000, up from the previous projection of $80,000.
The firm also expressed optimism about cryptocurrency mining stocks, citing bitcoin’s recent rise to around $74,000 and the positive response to new spot BTC ETFs.