April 19, 2024
Bitcoin at $51,845, Pauses Amid Inflation and ETF Concerns
Bitcoin price today

Bitcoin at $51,845, Pauses Amid Inflation and ETF Concerns

Friday, February 16, 2024: Bitcoin price is at $51,845, but its ascent pauses as it hovers around $52K at the Wall Street open. The latest US macro data exceeded predictions, resulting in Bitcoin’s stagnation during the final traditional finance trading session of the week.

The Producer Price Index (PPI) numbers for January added to the inflation concerns in the United States. Year-on-year, the PPI came in at 0.9%, slightly lower than the previous month but still exceeding market forecasts by 0.3%. This, coupled with the recent Consumer Price Index (CPI) data, heightened market caution regarding when the Federal Reserve might ease fiscal policy this year.

As per data from CME Group’s FedWatch Tool, the likelihood of the Fed cutting interest rates at its March meeting dropped to 8.5%, less than half the 17.5% chance at the beginning of the week. The Kobeissi Letter commented, “A March interest rate cut is likely completely ruled out after this data. Furthermore, a May rate cut has become questionable as well.”

Bitcoin had reached $52,884 on Bitstamp the day before, marking its highest level since late November 2021. However, sellers exerted pressure, and the price struggled to maintain momentum. Trader Skew highlighted the significance of the 21-period exponential moving average (EMA), currently around $51,000, on four-hour timeframes, noting the choppy price action and potential for a fakeout before a significant move.

On Feb. 15, U.S. spot bitcoin exchange-traded funds (ETFs) witnessed net inflows of nearly half a billion dollars. This added to a notable week for ETF products, experiencing a renewed surge in interest more than a month after their initial launch. Despite the ETFs removing more Bitcoin from the supply than added daily, concerns arose among market observers.

Venturefounder, a contributor at on-chain analytics platform CryptoQuant, highlighted the potential risks associated with a slowdown in ETF interest. In an analysis, they suggested that a flatlining or normalization in Bitcoin ETF net inflows could leave the cryptocurrency vulnerable to a significant retracement. The commentary noted, “Bitcoin ETF net inflow flatline/normalize is where the next 20-30% correction will start,” alongside a summary of the current flow situation.

An earlier examination detailed potential support levels for Bitcoin, projecting a range down to $34,000. As market participants closely monitored the evolving macroeconomic landscape, Bitcoin faced a pivotal juncture with considerations of Federal Reserve actions, inflationary pressures, and the intricate dynamics of ETF flows influencing its live price.

Image by frimufilms on Freepik

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